The Macau government’s “mid-term review” of the city’s gaming industry is already under way, Secretary for Economy and Finance Lionel Leong Vai Tac said on Wednesday.
The government has commissioned a local tertiary education institution to conduct the review, Mr Leong said. He didn’t identify it.
“Data and documentation collection is currently under way,” he added, quoted by public broadcaster Radio Macau.
There had been speculation locally that how each of Macau’s six gaming operators ‘scored’ in such a review could have a direct impact on whether they are invited to remain in the market when their concessions expire on varying dates between 2020 and 2022. There had also been speculation the review might influence whether any new concessions would be allowed. Mr Leong on Wednesday said that neither of those scenarios was an accurate reflection of the process.
Mr Leong said that the mid-term review was still at an initial stage and there was no deadline to present a final report. He was talking to reporters after participating in a show hosted by the Chinese language service of Radio Macau. The broadcast included the official answering questions telephoned by listeners.
“This review aims to assess whether the gaming operators are fulfilling their obligations under the concession contracts signed with the government,” the official stated following his radio appearance. “By appointing an academic institution to do this assessment, we want to ensure that results are objective and scientific.”
The official said that, among other factors, the review would analyse the introduction of non-gaming elements by each operator and how these had helped to promote Macau’s economic diversification away from gaming revenue. Mr Leong added that the review would also look into job creation and promotion opportunities offered to locals.
The official stressed there was “no direct relation” between the mid-term review and whether the government would allow more casinos or gaming operators in the future. He compared it to a “body check”.
The secretary in March had said however that negotiation on the renewal of the current gaming concession contracts would be based on the mid-term review.
Mr Leong on Wednesday added that the mid-term review would help the government to set out a long-term plan for the city’s gaming industry, after assessing if the objectives that had been initially proposed during the 2002 gaming liberalisation had been achieved. He didn’t spell them out in his comments on Wednesday, but it is on public record that one aim was to encourage more non-gaming and conference tourism.
The official on Wednesday also said he was holding discussions with Secretary for Administration and Justice Sonia Chan Hoi Fan on how to improve supervision on gaming advertising. He stated that the government would “soon” come up with a definition of this category, to ensure an efficient enactment of the ban on advertisements promoting gambling.
When asked about the government’s annual cash handout to local residents, which stands at MOP9,000 this year (US$1,127), Mr Leong noted that the handout was discretionary and had correlation to government budget surplus. As such, declining government revenues could lead to a revision to the policy, he pointed out.
“While we don’t think we’re in the danger zone yet, we believe that a wholesale cut to the annual handout could result in some amount of social unrest,” Union Gaming Research Macau Ltd analysts Grant Govertsen and Felicity Chiang wrote in a note following Mr Leong’s comments.
They added: “Whether this could be good or bad for the gaming industry remains to be seen. A case can be made that social unrest could lead to a relaxing of certain policies in order to boost the gaming industry (and therefore boost government coffers to a point where the cash handout is safe). At the same time, a more punitive case can be made going in the other direction.”
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