Inside Asian Gaming

August 2015 inside asian gaming 11 In Focus also a moment when gaming revenue, 83% of Macau’s government revenue in the first half of this year, continues to decline, and Macau faces increased regional competition. Although the current government aims to handle the concession expiration issue, Chief Executive Fernando Chui will leave office in December 2019, fours months before the first expirations, Beijing is likely to be more involved in both the selection of Mr Chui’s successor and the concession issue. Even if the current six operators are granted renewals, terms could be different and even unequal, according to experts in Macau and beyond, some of whom asked to comment anonymously. Gaming concessions expire in 2020 for SJM Holdings and MGM China and in 2022 for Galaxy Entertainment, Wynn Macau, Melco Crown and Sands China. The Macau government says it plans to begin talks on concessions with operators next year. Upon taking office last December in the revamped cabinet for Chief Executive Fernando Chui’s second five year term, Mr Leong said the government would assess operators’ performance in gaming along with their contribution to economic diversification through non-gaming offerings. THE HISTORY Following the December 1999 departure of Portugal’s colonial administration, Macau’s first Chief Executive Edmund Ho proposed ending the casino monopoly of Sociedade de Turismo de Diversoes de Macau (STDM) and offering new concessions. Mr Ho’s stated goal was to make Macau a more diverse tourist destination. Concession expiry offers a chance to put teeth into that goal. “The government’s aim has been a market where gaming is one of several attractions, much like a cruise ship,” Wells Fargo Securities Senior Analyst Cameron McKnight says. “We think those licensees who have contributed the most to diversification, and invested in Macau’s future, are likely to be viewed most favorably. In practical terms, we don’t know what that means, whether it’s the allocation of gaming tables or development land, or different terms on which licenses are renewed.” He notes that the authorities’ enthusiasm for non-gaming investment extends to neighboring Hengqin island in Guangdong Province, a joint development zone envisioned to complement and support land-short Macau. Experts say it’s too early to speculate about what conditions might be attached to new concessions. Increased tax or investment requirements beyond gaming could be added and concession Following the December 1999 departure of Portugal’s colonial administration, Macau’s first Chief Executive Edmund Ho proposed ending the casino monopoly of Sociedade de Turismo de Diversoes de Macau (STDM) and offering new concessions. Mr Ho’s stated goal was to make Macau a more diverse tourist destination. Concession expiry offers a chance to put teeth into that goal. Upon taking office last December in the revamped cabinet for Chief Executive Fernando Chui’s second five year term, Mr Leong said the government would assess operators’ performance in gaming along with their contribution to economic diversification through non- gaming offerings. Chief Executive Fernando Chui Sai On