GGRAsia – Macau leader vows to strengthen casino oversight

Macau leader vows to strengthen casino oversight

Mar 23, 2015 Newsdesk Latest News, Macau, Top of the deck

Macau’s Chief Executive Fernando Chui Sai On (pictured) announced on Monday that the government would strengthen oversight of the city’s gaming industry, as it prepares to launch a mid-term review of the sector. Mr Chui, who was giving his annual policy address, nonetheless vowed to take a cautious approach on how the city’s government intervenes in the industry.

“After a decade of opening up and rapid growth of the gaming industry, the pace of development has started to slow down,” the official said. “The government only plans to adjust the pace of the growth in this sector, without changing the momentum; seeking stable growth amid these adjustments.”

The mid-term review would be conducted this year by a tertiary education institution, Macau’s leader said.

Mr Chui stated that the Macau government plans to “enhance gaming-related laws and regulations, strengthen supervision of the gaming industry, regulate gaming businesses’ operation and continue to push for responsible gaming”.

The policy address added that the review of the gaming industry would analyse how each of the six gaming concessionaires have conducted their business since the liberalisation of the industry in 2002. The analysis would include the development of non-gaming elements, the creation of jobs and the promotion of Macau residents within each company.

The text of the policy document adds the government will also study the possibility of requiring casinos to submit regularly to the government their investment and development plans. Gaming operators would also be encouraged to source products and services from local companies.

This year’s policy address further states that the government would urge casino operators to provide transportation and accommodation to migrant workers. The idea was first included in the political manifesto of Mr Chui, issued in August 2014 prior to him seeking a second, five-year term in office, but no new details were disclosed on Monday.

The government would also seek to “adjust and control” the operation of casino buses, which mainly shuttle tourists between gaming properties and border crossings.

“This year, the government will summarise and analyse the development since the opening up of the gaming industry, and will come up with strategies,” Mr Chui said on Monday.

But the Chief Executive warned of the possibility of job losses arising from the “adjustments” to the casino industry, saying the government would keep a close eye and take the necessary measures to prevent the problem from affecting other industries.

New smoking rules

The policy address, as announced on Monday, confirmed the government would propose a full ban on smoking inside public areas, including casinos. It is expected that the ban would impact VIP rooms and mean that smoking lounges on mass floors would no longer be allowed; the latter an idea that has been met with dismay by some casino operators.

The city’s Health Bureau would carry out a review of the Tobacco Prevention and Control Law since its implementation three years ago, stated the policy address. New smoking rules are likely to be proposed in the second half of 2015, it added.

Banning either the use of tobacco on mass-market gaming floors – or any comprehensive casino smoking ban also covering VIP rooms, would be bound to have a negative impact on gaming revenue in Macau, several investment houses said earlier this year.

On Monday, Mr Chui also mentioned the “need to improve and adjust” the issuance of visas to individual travellers from mainland China.

The Macau government is working on a report detailing the capacity of the city to receive tourists, aiming to “enhance” – in the wording of the government – the mainland’s Individual Visit Scheme (IVS). The Chief Executive said the aim is to find a balance between tourism capacity and local residents’ quality of life.

Any restrictions to the IVS however might make things worse for the already under pressure gaming industry, Japanese brokerage Nomura said in a new report on Monday.

Mr Chui announced his 2015 policy address amid an unprecedented drop in gross gaming revenue (GGR) in Macau. The gaming sector has already seen nine consecutive months of year-on-year GGR decline, and is heading for a tenth in March.

The government expects average gross monthly gaming revenue of MOP20 billion (US$2.5 billion) this year, down from an earlier estimate of MOP27.5 billion, Mr Chui said.

On Monday, the Chief Executive announced that the government would work on drafting a five-year plan to transform Macau into a centre of tourism and leisure, as well as study the implementation of a citywide minimum wage.

Mr Chui also vowed to build more public housing and to improve the city’s transport infrastructure, including completing a study on a possible fourth road transport link across the water separating Macau peninsula and Taipa. A decision on whether the proposal would be for a bridge or a tunnel will be made later this year.