Inside Asian Gaming

INSIDE ASIAN GAMING JAN 2019 18 COVER STORY “Because the Japanese market is perceived as having the potential to become the biggest regional competitor to Macau, the government may be assuming a wait-and-see attitude before revealing its own strategy for the future.” – Carlos Eduardo Coelho S ix months after the Macau government promised to release details of the re-tendering process for Macau’s six gaming concessions and sub- concessions, the big news coming out of the SAR in late 2018 was the absence of any news at all. Pressed by reporters on a potential timeline for information during a panel session at MGS Summit in mid- November, the Director of Macau’s Gaming Inspection and Coordination Bureau, Paulo Martins Chan, deflected multiple questions on the issue, stating, “You all seem quite concerned about this question but I can’t give any related news. Of course the SAR government will make a decision and the DICJ will also participate in this round.” Two days later, Macau Chief Executive Fernando Chui Sai On offered similarly little insight on the re-tender issue, adding only that the government was still “studying how to deal with” the early expiration of licenses held by SJM Holdings and MGM China in 2020, coming two years before those of Galaxy Entertainment Group, Sands China, Wynn Macau and Melco Resorts expire in 2022. This lack of information prompted US brokerage Telsey Advisory Group to issue a note voicing serious concerns over the absence of information regarding the government’s plans. “We are becoming more and more concerned over the lack of news surrounding gaming concession renewals,” wrote Telsey’s Brian McGill and Alec Cummings. “In last year’s policy address, Mr Chui had suggested that mid-2018 would be an appropriate time to address this issue. Moreover, last year the Macau government commissioned two studies on the gaming industry concession renewals, both of which were expected to be completed by the third quarter of 2018. “We are obviously not in the third quarter anymore and we are well past ‘mid-2018’. Given this, and considering the current geopolitical tensions between the United States and China, we are watching this situation closely.” All of which brings us to the million dollar questions – is the government’s delay in releasing information really cause for concern, and what can we expect from the re- tender process once details are finally revealed? According to Jose Alvares, a partner at CA Lawyers in Macau, the mere suggestion that there has been a delay is in itself misleading given that SJM’s concession doesn’t expire until 31 March 2020. “People seem to forget that the initial tender was published on 1 November 2001 and gave interested parties merely a month to submit their proposals,” Alvares points out. “The decision on the pre-selection was then published merely a couple of months later on 8 February 2002.” MdME’s Carlos Eduardo Coelho suggests that Macau’s government may also be waiting to review and analyze the new legal framework adopted by Japan. “Because the Japanese market is perceived as having the potential to become the biggest regional competitor to Macau, the government may be assuming a wait-and-see attitude before revealing its own strategy for the future,” he explains. Of greater significance, however, is the likelihood that the Macau government will start by simply extending Macau Chief Executive Fernando Chui Sai On