The scheduled expiration of Macau’s six casino concessions in June 2022 could be delayed after the government said it won’t have its proposals for determining the process ready for lawmakers to review before the fourth quarter of next year.
The new timetable was announced in a policy address by Chief Executive Ho Iat Seng outlining the government’s priorities for the upcoming year.
What it means is that a review by the Legislative Assembly, which is required by Macau law, won’t take place until the proposals have cleared a public consultation slated sometime for the first half of 2021, although the government has been vague as well about when that might happen.
Prior to the Covid crisis Macau’s casino market was the largest in the world in terms of gaming revenue, and its dramatic expansion over the last two decades suggests the process for rebidding the concessions will be enormously more complex than it was when they were first bid out in 2001.
With that in mind, six months would hardly seem to be sufficient for lawmakers to study and approve a new retender and for the government to then launch it.
Also to be considered in the process is the devastation the pandemic has wrought upon the market, which limped along for most of 2020 with virtually no revenues because visitation from mainland China, its principal feeder market, had been shut down. It was only in September that the central government restored visas nationwide for tourist travel to the territory, and visitation and gaming revenues are still far below pre-pandemic levels.
Economic diversification is expected to figure prominently in the process as well. It’s been talked about in official circles for years, and the pandemic has revealed in terms that have never been more stark how vulnerable the local economy and its tax base are to any disruptions to gaming-related tourism.
“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,” said lawmaker Ella Lei Cheng, who chairs a subcommittee of the Legislative Assembly on public concessions.
There is also the fact that most of the six license holders have embarked on massive capital expansion projects that are either under way or will be while the draft proposals are being debated.
Ho, for his part, has said he is aware of the potential for a delay in the retender without acknowledging, at least not publicly, that it’s likely to be necessary. In the policy address he said only that the government will have “relevant mechanisms in place to handle the situation.”
“We still have time,” he said.
In the local legal community others are not so sure.
“In regards to 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,” said attorney Carlos Lobo.
By law, the concessions can be extended up to five years, and attorney Pedro Cortés told gaming news site GGRAsia he thinks it would be “good” for all involved if the government availed itself of that option. It could then use the extension to refine what it wants from the industry in terms of economic diversification and community development.
“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 for at least two years, if not five years.”
