G2E Asia traditionally has powerful keynote speakers. Now in it’s 11 year, G2E Asia has presented speakers like Stanley Ho, the founder of SJM; KT Lim, chairman of Genting; Sheldon Adelson of Las Vegas Sands; Jim Murren of MGM Resorts; Len Ainsworth, the founder of Aristocrat Technologies and Ainsworth Technologies, and many others.
This year was no different. Francis Lui, the vice chairman of Galaxy Entertainment, was first up to discuss the state of the gaming industry in Macau. Addressing almost 500 attendees at G2E, Lui made a case for creating events in Macau that will make it a regional destination for non-gaming activities. But in a dramatic graph, he said Macau has only 33,000 hotel rooms, compared to 78,000 in nearby Hong King and 155,000 in Las Vegas. He said more hotels will support major events and conventions, diversifying the Macau economy.
He also pointed out that analysts who were fearful of more effective regulations on the Macau gaming industry were missing the point. He says anyone operating in Macau should welcome this higher level of regulation.
“If you don’t really embrace the change, you shouldn’t be in Macau,” he said. “It is very clear what the Chinese central government wants and the Macau government wants is to have more regulation, more transparency in the industry
“We are all for it. This is the way we feel comfortable.”
He also told reporters that the new facial recognition system that will go along with the UnionPay credit cards carried by most Chinese gamblers isn’t a bad thing. He admitted it will have an impact, but that “I think it is a matter of getting used to it.”
At a later panel, Sands China President and COO Wilfred Wong says he doesn’t think the planned introduction of new customer verification technology at automated teller machines in Macau to have a negative impact on his firm’s casino business.
“We have always supported the government initiative to improve the city’s business environment,” Wong said at G2E Asia. “This initiative helps prevent some illicit ways used by some people to obtain cash via the use of several credit cards and lend it to others; this is something that we also don’t like to see.”
Wong continued, “I don’t think this government initiative is going to affect us, because for the ATM machines here, there is already a set limit on cash withdrawal per card,” but failed to mention that many Macau gamblers have several false identities with which to withdraw cash, and convince friends and acquaintances to allow them to set up even more accounts. Facial recognition will put a stop to these practices.
Lui also made a plea for lower taxes in Macau, pointing out that many new jurisdictions have a lower rate than Macau’s 39 percent rate.
“There needs to be an open discussion of how Macau can ensure its long term competitiveness,” he said.
Following Lui was Paulo Martins Chan, the director of Macau’s Gaming Inspection and Coordination Bureau (DICJ). Chan discussed the current licensing regime for junket operators, which has been significantly tightened since he took office a little more than a year ago.
“We are approving licences on a case-by-case basis,” he told reporters following his keynote address. “Of course, we want to keep junkets that are financially healthy and capable.”
GGRAsia reported in April that Chan had plans to audit at least 60 junket firms.
“We have audited about 40 junkets,” he said last week. “Some of them are in a good financial position, while others have to show some improvement. We have told them to improve their accounting systems.”
As for a decrease in taxes, Chan wouldn’t rule it out.
“As of now we don’t have any plan to revise the taxation regime but of course everything will have to be considered,” he said. “At this stage we are trying to collect more opinions from different sectors so that in the future we can make a better decision.”
While still a few years off, the renewals of the licenses for the concessionaires is always a hot topic. And when Chan said the current licensees would have to re-apply, some took it to mean that the bidding process would be reopened.
Grant Govertson, the analyst for Union Gaming, said Chan’s comments were nothing new.
“In no way was the government suggesting anything other than what’s already been known for years,” he said in a note to investors. “Simply put there is no upcoming public tender process for the Macau gaming licenses as the government is still studying the renewal process and has yet to come to any conclusions on how to best go about renewals at this point.” Concessions in Macau expire between 2020 and 2022.
In another keynote panel, operators Wong and John Shigley, chief operating officer, gaming, MGM China Holdings, were joined by Derik Mooberry, group chief executive of gaming, Scientific Games; Mitchell Bowen, managing director, Australia, New Zealand and international, Aristocrat Technologies; and Walter Bugno, chief executive officer, IGT International. Moderated by GGB Publisher Roger Gros, sports betting was a topic at the session. While sports betting in Macau is a monopoly held by Macau Slots, Wong was hopeful that the casinos could work with this company to introduce it in the properties.
“What we may do is to try to see how we can cooperate with this operator because we agree that sports betting is prevalent everywhere and we would like to be able to provide this offering to our customers,” he said.
Shigley agreed that it would benefit the casinos.
“It’s going on, it’s happening. Even in Nevada where it’s legal, the amount of legal betting is dwarfed by the amount that’s off the books,” he said.
“There’s a wide desire to bet on sports in Asia and it’s already huge business. We would love to have a piece of it and pay a whatever tax rate is most relevant to develop reinvestment and pay the best salary for our employees.”
With the opening of the Hong Kong-Macau-Zhuhai bridge later this year, Wong said there will be a significant impact, pointing out that more than 1,000 flights arrive each day at Hong Kong International Airport versus less than 100 at the Macau airport.
“We are preparing for this new onslaught of MICE business,” he said. “In fact last year we have seen more regional conferences being held in Macau and this year we are seeing a lot more delegations who are looking for new venues other than the traditional venues such as the U.S. and other destinations.”
Wong, whose company controls more than 45 percent of the city’s hotel rooms, echoed Lui when he said that there is an increased need for hotel rooms. Shigley agreed, admitting to be jealous of the Sands China room inventory.
“We definitely need more hotel rooms,” Shigley said. “We need to have more rooms to accommodate the more casual customer who just likes food and drinks and shows. We also need the infrastructure to support it to make the whole process smooth, fast and pleasant.”
As for the trade show at G2E Asia, it set a record for square meters, completely occupying the ground floor of the Expo Center at the Venetian. Growth was strong in the iGaming segment, as well as the lottery since the Asian Lottery Forum was co-located with G2E this year.
Although official attendance figures haven’t been released, officials expected a record number of delegates to have attended G2E Asia, as well.
