GGRAsia – To extend current Macau concessions realistic say observers

To extend current Macau concessions realistic say observers

Nov 17, 2020 Newsdesk Latest News, Macau, Top of the deck

It would be hard to complete a public retender process prior to the June 2022 expiry of the six current Macau gaming licences, in the light of a legislative timetable announced on Monday by the city’s government, say separately several lawyers with expertise in local gaming legislation.

Extending the existing concessions – as allowed for under the current law – might be a sensible option, especially against the background of disruption to consumer demand amid the Covid-19 pandemic, it was suggested by one commentator.

The Macau government aims to submit proposed amendments to the current gaming law, to the city’s Legislative Assembly, only by the fourth quarter next year – as highlighted on Monday in the authorities’ Policy Address 2021.

“In regards the tender itself and the time frame for it, considering the best case scenario where the law gets approved by October [2021], it would still be extremely ambitious to expect to have everything done – including potential appeals to Macau courts by June 2022,” lawyer Carlos Lobo told GGRAsia, referring latterly to any legal challenge that might be brought by an unsuccessful candidate.

Macau’s Chief Executive, Ho Iat Seng, declined to comment to local media in a Monday briefing, on whether the government would seek to grant any extension to the city’s current six gaming licences. But he stressed that public consultation would be done before the proposed gaming law revision was discussed at the assembly.

Mr Lobo noted: “If you consider past experience – the [public] tender of 2001 – and the fact that the situation today is more complex than 20 years ago, it seems unrealistic not to postpone” the proposed tender.

Pedro Cortés, a senior partner at law firm Rato, Ling, Lei and Cortés, told GGRAsia an extension to the gaming concessions would be “good” for all involved, including the Macau community, as it could enable the government to have more time to define what it wants for the gaming industry.

“I have been of the view for quite some time – and even more now with the Covid-19 situation – that the Chief Executive should extend the existing concessions – and sub-concessions – for at least two years if not five years,” said Mr Cortés.

Even at this late stage of the current concessions, there were “investments being made and properties yet to be opened,” by the present rights holders, Mr Cortés remarked to GGRAsia.

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

In the event that the Macau government chose not to extend the current gaming concessions, it should define the public policy for the gaming industry and for the retender “well in advance” of the new bidding process, Mr Cortés stated.

Interests at stake

Macau gaming lawyer Sérgio de Almeida Correia mentioned to GGRAsia how the ‘press ahead’ scenario might look.

“When the public consultation on the new gaming law begins, it will be immediately possible to know what the government’s intentions are,” said Mr Correia.

As soon as the consultation process starts, the lawyer reckoned that candidates interested in pursuing Macau gaming concessions could “start working on their proposals”.

“This will allow interested parties to develop and complete their proposals. As long as there is organisation and good management of the tender process, there’s still enough time,” Mr Correia said.

Under the press-ahead scenario, approval of the amended gaming law would have to be done “as early as” October 2021 when the new legislative term of the city’s assembly is due to begin, following a likely election process in September.

In terms of length of retender process, “the shorter… the lower the chances of corruption, lobbying and influence peddling,” Mr Correia remarked.

The lawyer added: “Note that the government is no longer looking for someone to build new, huge integrated resorts in Macau. There’s no land. And the hotels we have, seem to be more than adequate for the current requirements, taking into account the policies defined by the [Chinese] central government for Macau.”

Ella Lei Cheng I – a legislator who currently chairs a sub-committee at the assembly reviewing Macau’s public concessions – told GGRAsia that her group was still working out a date for a meeting with the Macau government to hear its views on the concessions topic.

“I would personally be interested to hear the government’s directions on how the gaming industry could help in diversifying local tourism resources, and how local employment rights will be safeguarded,” Ms Lei told us.

Lawyers Mr Lobo and Mr Cortés assumed the Macau government would, via the amendment of gaming law, address the number of Macau’s gaming concessions; review and change the gaming tax structure; and define the powers of key employees at a gaming concession, as well as the social responsibilities of a gaming concession.