Inside Asian Gaming

In Focus no accident. Although political analysts specialising in China think they know what will happen after the new leaders come in (i.e. more of the same in terms of cautious incremental reform across the whole economy) and although the names of the expected new leaders have been widely reported, the reality is that the succession process isn’t over until it’s over. It can sometimes throw up surprises because of internal party power struggles not visible to the outside world. Successors are not usually formally announced in advance but instead ‘signalled’ to the wider world by small clues such as their position on a podium at an official event, or by being given licence to make a speech on a key topic at a politically important moment. Slowly does it Until the direction of the national leadership is clearly decided, it’s unlikely that the Macau government will do anything bold or decisive in terms of Macau gaming industry policy, for fear of alienating either of the central government factions currently competing for power.These factions inbroad brushtermsarethepro-marketreformersand the more traditionalist pro-state ownership faction. The latter are thought to be less amenable to further expansion of (largely foreign-owned) commercial gambling than the former. Even when a political succession is actually in place in China, it’s likely to take time for the ‘winners’ to consolidate their position, gradually easing out their opponents within the central government and promoting their own supporters. At the time of the last leadership succession in 2002, it took around two years for the new leadership to consolidate its hold on power, according to political analysts. This doesn’t mean it will be two years before the Macau government feels comfortable about giving a construction start date for any more casino projects on Cotai. But it does suggest that were any of the three operators currently waiting on approval for new Cotai projects—MGM China, SJM and Wynn; as well as the one operator (Melco Crown Entertainment) President Hu Jintao Premier Wen Jiabao “Until the direction of the national leadership is clearly decided, it’s unlikely that the Macau government will do anything bold or decisive in terms of Macau gaming industry policy, for fear of alienating either of the central government factions currently competing for power.” INSIDE ASIAN GAMING | March 2012 18