he bombshells were dropped during a question and answer session at the city’s Legislative Assembly. Legislator Wong Kit Cheng had asked why there was no cap on electronic gaming machines, to mirror the cap – at three percent compound annual growth – on live dealer gaming tables until the end of 2022. Last year Macau grossed us$ 45.2 billion.
Secretary for Economy and Finance Francis Tam Pak Yuen responded: “We have actually started some studies on this since the current slots are so different to what we had in the past due to the rapid growth in the development of electronic gaming equipment.” He added: “We hope we can introduce to the public the government thoughts on this at an appropriate time.”
It wasn’t immediately clear whether Tam was referring specifically to so-called live dealer electronic table games – that have the same game play as live dealer tables but with electronic betting and bet settlement – or to traditional slot machines, or a combination of the two. The former product category has grown significantly in the past few years because they offer much lower minimum bets than traditional tables.
Wagers on the mass-floor traditional tables have been pushed up by a combination of limited supply and increased demand as more and richer Chinese visit Macau. The tourists include so-called premium mass players who don’t necessarily qualify for the credit-based rolling chip VIP programmes but are willing to pay up to us$ 516 cash per hand of baccarat.
Growth limits
Tam admitted only imposing growth limits on traditional gaming tables might not be enough. “Gaming tables may not play a major role in the casino resorts in the next 10 or 20 years and perhaps the electronic gaming machines would have accounted for a principal position instead,” said the secretary.
Official data show the number of slot machines reached 14,775 by the third quarter of last year, rising by a quarter from end of 2008. Data show revenue from slot machines increased by nine percent year-on-year to us$ 1.3 billion in the first three quarters of last year while the overall gross gaming revenue surged by 16.7 percent to us$ 31.9 billion at the same time.
But Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau, told Business Daily in March 2013 by e-mail: “Gross gaming revenue from ETG [electronic table game] with live dealer is classified as table revenue, while revenue from ETG with no human dealer is counted as slot revenue”.
Tam also told the assembly yesterday that the question of whether a cap on traditional live dealer table numbers will continue after 2022 depends on discussions about possible renewal of the current gaming concessions. Those talks are due to start in 2015, Mr Tam has previously said. The government and the operators understand that “there is doubt whether the city can maintain the current scale of gaming revenue amid regional competition” added Tam yesterday.
He reiterated that the proportion of non-gaming elements proposed for new Cotai resorts was “a major consideration” for the government when it came to distributing traditional tables in the next few years.
Tam also said the city’s gaming growth has been “under control” since 2008, when former chief executive Edmund Ho Hau Wah announced the administration would not accept any new land applications for gaming.
The difficulty posed for industry analysts is knowing exactly how many gaming land allocations were approved prior to that date. ‘New’ projects keep being announced claiming pre-2008 approval for gaming.
