GGRAsia – A sharp rise in casino op tally not good for Macau: Cunha

A sharp rise in casino op tally not good for Macau: Cunha

Sep 20, 2019 Newsdesk Latest News, Macau, Top of the deck

Veteran Macau-based lawyer Rui Cunha says the city lacks capacity to deal with a potential sharp jump in the number of casino licence holders as part of the anticipated retender process for Macau gaming rights. Mr Cunha (pictured in a file photo) says that, at most, Macau could only manage a “small” increase in the number of operators. Currently there are six licensees, known currently in the Macau context as either “concessionaires” or “sub-concessionaires”.

“To increase the number of concessionaires to 10, 15 or 20, we would need to have an administrative system able to keep up with such development”, to ensure oversight and supervision of all operators, Mr Cunha told reporters on Friday on the sidelines of a public event. “That is not easy, particularly in industries that work round clock” and have extensive social impact, he said.

Mr Cunha is one of the longest-serving advisors of Macau’s former monopolist in the casino sector, Stanley Ho Hung Sun. In 2017 Mr Cunha stepped down from the board of Macau casino operator SJM Holdings Ltd, a business founded by Mr Ho. The lawyer had been a director of the Hong Kong-listed company since its incorporation in 2006.

Mr Cunha remains a consultant of SJM Holdings, according to information available in the official website of legal firm C&C Lawyers. He is a founder and senior partner of the latter firm.

“I think Macau has enjoyed enough development and [society] is satisfied with having six [casino licence holders],” Mr Cunha told reporters on Friday. “I don’t think there is a need to reduce the number [of operators].”

Any increase “would have to be a small one,” he suggested. “I don’t think it would beneficial to Macau to increase too much the number [of licence holders].”

The veteran lawyer pointed out the city was already struggling to cope with a flood of visitors. The tally of tourist arrivals to Macau in full-year 2018 was slightly above 35.80 million, up 9.8 percent from the 32.61-million record set in 2017, according to official data.

“We are already at full capacity regarding ability to welcome more visitors,” said Mr Cunha. “If more casinos were to open eyeing to attract even more people, that would only further exacerbate existing problems” related with overcrowding, he added.

The current six casino licences expire in June 2022. The Macau government has reportedly been working on amending the city’s gaming law, preparing for the anticipated retender process for its Macau gaming rights.

Mr Cunha said that – as part of the gaming law revision – the government could however opt to remove from the law any limit on the number of licensed gaming operators. Then, it would be up to the local authorities to decide on the number of licensees, he explained.

The veteran lawyer suggested however that the government should do away with the current sub-concession system, as part of the gaming law revision.

The sub-concession arrangement allowed for six licensees in the Macau market rather than the three originally mentioned in the law enabling local market liberalisation that occurred at the turn of the 21st century after 40 years of monopoly.

It was “time to end” sub-concessions, Mr Cunha said. He argued that would easily be done via a minor tweak of the gaming law, allowing all operators officially to enjoy the same legal status, so solving some “legal issues” created by the sub-concession arrangement.