Macau CE Supports Stricter Regs, ‘Big Destination’ Goals

Speaking at a parliamentary session last week, Macau Chief Executive Ho Iat Seng (l.) came out in support of rigorous amendments to local gaming laws, as well as plans to expand the city’s profile as a tourism destination. Both will be vital to Macau’s recovery in a post-Covid age.

Macau CE Supports Stricter Regs, ‘Big Destination’ Goals

Speaking before lawmakers in a parliamentary session last week, Macau Chief Executive Ho Iat Seng said proposed strict amendments to the city’s gaming laws are essential not only to improve the SAR’s chief industry but to earn support from Mainland China.

The proposed amendments topped the agenda at an April 12 meeting of the Legislative Assembly (AL). Ho acknowledged that the gaming industry is in a slump due to a surge in Covid cases and the city’s tough “zero-tolerance” pandemic policy. However, he added, it’s also the ideal time to make vital changes.

“The (existing) gaming law has not been thoroughly enforced in the past,” Ho told the assembly. “I hoped that the current period would be an opportunity to rectify the industry’s standards and ensure the healthy development of the casino industry. Then we could earn support from the mainland. Otherwise, Macau will find itself on a narrower and narrower road.”

He said gross gaming revenue (GGR) “reached MOP$60 billion (US$7.4 billion) when we had 6 million visitors. However, our GGR has never reached MOP$400 billion (US$49.6 billion) when we have 40 million visitors.”

According to Inside Asian Gaming, Ho said proposed amendments to the current gaming laws don’t change them, but reflect a commitment to enforce them. “Unlawful conduct such as side-betting caused significant tax evasion and brought serious negative impact to Mainland China,” he observed.

The chief executive also spoke about the controversial plan for satellite casinos in Macau, which must find a permanent home with their licensed concessionaires or be winnowed out over a three-year period.

Satellite casinos, while technically operated by concessionaires, are in fact owned and promoted by third parties. Currently, there are 18 satellites among 40 casinos in the territory; 14 operate under the license of SJM Holdings and the other four are linked to Galaxy Entertainment Group (GEG) and Melco Resorts and Entertainment Ltd.

Ho said the satellites were never legally sanctioned and therefore cannot claim losses under the amended regulations. A recent report from Macao Polytechnic University agreed that the crackdown on satellites is called for, as they are “fraught with opacity and undesirable business practices.”

On labor issues, Ho said the government would require concessionaries to reduce the number of non-resident workers over time in order to ensure the employment of local employees.

He also used his bully pulpit to express displeasure with the city’s status as a tourism destination. According to the Macau Daily Times, lawmaker Cheung Kin Chung, a “tourism industry practitioner,” asked Ho what the government will do when the pandemic ends to help Macau become a “Big Destination” with regional tours in the Greater Bay Area.

Ho replied that the city must bring back mainland tourists, specifically tour groups, while complying with Covid countermeasures. He also said Macau must look beyond a single feeder market, Mainland China, for visitation.

“In 1999, we had only about 7 million tourists, but they came from a wide array of origins: Southeast Asia, Japan and Thailand,” Ho recalled. “We’re too single-minded now.”

Again, he said, this dormant period, which he referred to as “breaktime,” is the time to lay the groundwork for future success. “We now understand what would happen if we only focus on a single market,” Ho said. “We need to become an international tourism and leisure destination, not a Chinese destination.” He criticized local tourism operators for the lack of appeal in city offerings including retail options, dining choices and brands.

Finally, Ho noted that Macau is likely to have a “big problem” in terms of holiday tourism unless a recent Covid-19 outbreak on the mainland is resolved.

“If we do not see a zero-Covid-19 case scenario there by this month’s end, we are going to have a big problem with the May 1 (Labor Day) holiday,” he warned.