Number of gaming operators should not exceed six

Macau: no increase in gaming licensees

Reading time 3:13 min
(Macau).- Francis Tam Pak Yuen, Secretary for Economy and Finance, said there “should be no increase” in the number of gaming concessionaires – six at present – allowed in the city following the expiry of the current permits in 2020 and 2022. “The government has not determined whether [the gaming concessions] should be renewed for five years. The government has no stance on this matter,” said Mr Tam.

“But it is impossible for the government to have no stance on all issues [regarding the renewal of gaming concessions],” he said on the sidelines of the Chinese People’s Political Consultative Conference. “For example, there should be no increase to the number of gaming operators, which is six now.”

Mr Tam’s statement on the length of “renewed” concessions has surprised some commentators on Macau law. It also potentially highlights confusion around the use of the term ‘renewal’ and how that applies to Macau law.

Legal precepts

One person told Business Daily: “What is amazing is how everyone writes about it as if there were no legal precepts ruling the subject of Macau gaming concessions. Of course the relevant Macau law can always be changed or amended. But, until then, it is important to mention the existing precepts.”

The person added: “The relevant statute is Law 16/2001. It was not made for a one-off tendering process. It was established as a principle.”

Article 13 (1) of Law 16/2001 states: “The term of a concession for the operation of casino games of chance is established in the concession contract and cannot be of more than 20 years.”

Article 13 (2) adds: “If a concession is awarded for a period of less than the maximum authorised by the present law, the Government may, at any time and up to six months prior to the end of the concession, authorise one or more extensions of the concession, as long as the total period does not exceed the maximum term foreseen in the previous number.”

The statute adds: “When the maximum term foreseen in no. 1 is reached, the duration of the concession may, exceptionally, be extended, by means of a substantiated order issued by the Chief Executive, once or more times, as long as the overall period extended does not exceed five years.”

In other words, the law mentions the power of a chief executive to extend existing concessions by up five years. It doesn’t foresee the government cherry picking how long it would like future, new, concessions to last – whether they are “renewals” in the sense of going to existing market operators or concessions granted to new entrants, argue several jurists spoken to by Business Daily.

Contract wording

Mr Tam said in Beijing: “Regardless of how the contracts are renewed or set up, it is definite the public will have more demands for the operators in the next stage [after 2020 or 2022]. The government will listen to the opinions of the public and propose the same demands for the gaming operators,” said Mr Tam, who is also a Macau delegate to the NCCPCC – China’s senior political advisory body.

He continued: “There are some reasonable demands like how to promote more locals [to casino managements] and how to take better care of the local enterprises namely in cooperation [with the sector]. The regulations for the gaming sector will also be stricter in the future. These are all reasonable demands that [on which] the government definitely has stance.”

Secretary Tam did not comment when asked whether the current three gaming sub-concessionaires will turn into full concessionaires post-2020 and 2022. Mr Tam only said such a change would require revision of the city’s current gaming law and the approval of the Legislative Assembly.

He denied having discussions with the central government prior to giving his thoughts on the gaming concessions process.

Asked whether he will leave the government after his 15-year tenure ends by this December, Mr Tam only answered with a smile, “Don’t talk about this now.”

Francis Lui Yiu Tung, vice chairman of Macau gaming operator Galaxy Entertainment Group , said in an interview with the Hong Kong Economic Times newspaper on Friday that he is “not worried” about the gaming concession issue.

“I believe the Macau government is a capable and understandable government,” he told the newspaper. “I believe it will strive for a balance and [will] know how to handle issues like the number of gaming tables.”

“So I am confident that the Macau government will give a reasonable solution,” Mr Lui said. “Since the establishment of the Macau SAR, the government has always supported the [gaming] industry and backed the socio-economic development.”

He added that the talk on the gaming renewal is only at an early stage and any official dialogue and consultation will begin next year.

Separately, touching on Galaxy’s project on the nearby Hengqin, Mr Lui told the Hong Kong newspaper that the project will include both land and water-based sport facilities.

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