GGRAsia – No need to delay gaming licences tender: Macau govt

No need to delay gaming licences tender: Macau govt

Apr 18, 2019 Newsdesk Latest News, Macau, Top of the deck

Macau’s Chief Executive, Fernando Chui Sai On (pictured), says there is no need to delay the launch of a fresh public tender process for gaming rights prior to the expiry in 2022 of the current concessions for the city’s six casino operators. But the official didn’t specify whether such a process would be in that expiry year, saying that a time frame would depend on relevant preparatory work.

“I think that the Macau government has now sufficient conditions to launch a public tender [for gaming concessions], and that involves some internal work and amendments to existing legislation,” said Mr Chui on Thursday. He mentioned two main tasks: revising the Macau gaming framework law – also known as Law No. 16/2001 – and revising Administrative Regulation No. 26/2001, which provides the terms and conditions of the public tender organised to grant concessions to operate casinos in Macau.

The Chief Executive made the remarks at a question-and-answer session with Macau legislators, held at the Legislative Assembly on Thursday. Mr Chui was replying to a question from legislator Leong Sun Iok, from the traditional labour grouping known as the Macao Federation of Trade Unions.

Macau gaming law states that the licences of the existing gaming rights holders can be extended for a maximum of up to five years from the 20-year term of such a concession, via a Chief Executive decision. But once a gaming concession contract expires, any new concession would have to be granted via an international public tender.

Mr Chui said on Thursday that the Macau government had already started some preparation work regarding a public tender for new gaming concessions, noting that authorities would be “happy to listen to public opinion” regarding such a process.

“As to whether we will authorise a [short-term] extension for the [current] gaming operators, I think we now have sufficient conditions [to launch a public tender],” he stated. “For instance, we have sufficient time to make amendments to [existing] legislation and time to prepare the tender,” added the Chief Executive.

“So, at this moment I don’t see any need for delaying the tender,” he further stated, suggesting that the government was not inclined to extend the existing concessions beyond 2022.

Mr Chui hinted that a tender for fresh gaming rights would in likelihood have conditions attached, such as that applicants must pledge to increase non-gaming elements in the Macau gaming market, that they should enhance social safeguards for employees, and that they should be able to contribute to the further transformation of Macau into a high-quality tourism destination.

The Macau government announced last month that the city’s six operators would be on the same finish line for their current concessions, i.e., June 26, 2022, after the government approved a request to extend the gaming concessions of SJM Holdings Ltd and MGM China Holdings Ltd. Those permits were different from those of the other four licensees, in that they had been granted for a 18-year period and had been due to end in March 2020.

On Thursday, Mr Chui said the decision to extend the licences of SJM Holdings and MGM China was made “after a comprehensive and legal analysis”.

He added: “Aligning the terms of all the gaming concessions will benefit the preparation for the public tender, and that helps maintain stability in social and employment terms.”

Investment analysts covering the Macau gaming sector – as well as some experts on Macau gaming law – had anticipated there would be a new public tender process in the “middle of the next decade” under a different Macau administration from the current one. Such a timeline for a public tender assumes an extension to the presence in the Macau market of the six incumbent operators would only occur after what will now be the common expiry date of 2022 for existing rights.