High-stakes licensing moves in Macau

Macau launches a public consultation today on gambling. And that could include capping the number of licenses, Macau authorities revealed yesterday.

There are currently six gambling licenses, which expire next year.

Secretary for Economy and Finance Lei Wai-nong said in a briefing that the consultation will run for 45 days until October 29.

People are being invited to comment on nine aspects of the gambling business, including how many licenses should be given out and how long the licenses should last.

On how many licenses the administration would like to grant, Lei said officials have not settled on a precise number and would like to hear public opinions before making a call.

Lei did stress, however, that gambling has driven the development of Macau, including employment and welfare.

So it was necessary to maintain a certain scale for the gaming sector, Lei said, hinting that the number of licenses was not likely to be reduced sharply.

“But we cannot let the gambling industry keep expanding without a limit,” he added. “So we need to set a suitable upper limit of the number of gaming concessions during the consultation period based on our past experience.”

Lei went on to say the administration would also like to hear people’s opinions on how long the licenses should last and specifically whether gaming operators could still be granted licenses for 20 years.

The licensed gambling business in Macau started in 2003, Lei noted, and many gambling and tourism facilities needed to be funded from scratch at that time.

He added that there could be differences in license terms as the sector has come of age and many facilities have been completed.

Macau authorities also said the current status of a sub-concessionaire will be prohibited.

In 2002, the gaming regulator restricted the number of casino concession licenses to three, and those licenses were given to Wynn Macau, Galaxy-Sands and SJM Holdings.

However, three sub-concussions were derived from the initial concessions after the split of Galaxy and Sands. That saw Sands awarded a sub-concession license from Galaxy by the government.

Melco PBL Gaming (Macau) and MGM Paradise followed the practice and received sub-concessions.

“The Macau government proposed to prohibit the sub-concessionaire in the gaming law and to reexamine the number of licensing for gambling operators,” noted Ian I Lin, consultant to the secretary for the Economy and Finance Office.

Lei said Macau authorities are considering introducing government representatives in gambling companies and will clarify criminal liability and the punishment system to the companies.

Authorities will also consider inserting non-gambling elements into the licensing framework, Lei noted.

Five face-to-face consultation sessions during the 45-day consultation period have been set, with the first on September 20 for gaming companies and junkets only. The other four sessions on September 29, October 9, October 13 and October 19 are for the public.

The hope is for healthy and sustainable development of the gambling industry through improvements to the regulatory system of casinos, Lei added, and the administration also aims to increase competitiveness.

Macau collected 3.27 million patacas (HK$3.17 million) in tax revenue from the gaming industry in August – a year-on-year increase of 27 percent.

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