Special file – All that’s left is the announcement …
… That the public tender is postponed and that the six operators will see an extension of their concessions.
MB June 2021 Special report | Gaming: The road until June 26, 2022
For the first public tender, held two decades ago, it took almost nine months from the publication of Law 16/2001 for everything to be done.
It is only a matter of time before the government announces that it is not time to launch an international public tender for the granting of gaming concessions as planned, according to several experts consulted by Macau Affairs.
Although the government will most likely use the pandemic to justify the likely postponement of the public tender and the need to resort to the option of extending current licenses – an argument our sources believe most of the population will understand – the truth is that in parallel with the consequences of COVID-19, there is a much more practical problem: the lack of time to prepare everything by June 24, 2022, when the first of the concessions (the one de Wynn’s) should expire.
The first “problem” is the need for a revision of the current law, which will require a few months of discussion before approval by the Legislative Assembly.
Before the bill reaches lawmakers, it will be assessed through public consultation. Last March, the Secretary of the Economy and Finance declared that the “preparatory work” for this public consultation was “in progress”. Lei Wai Nong added, “We have prepared to launch the consultation in the second half of this year. “
Given that the Legislative Assembly elections will take place in September and the government does not appear interested in letting the issue become a topic of electoral discussion, the bill could begin to be evaluated in the fourth quarter of this year. If authorities take emergency or expedited measures, they could be approved in January.
From there, it would be necessary to launch the call for tenders, give the interested parties time to submit their proposals, discuss their intentions with each of them and then make the decisions. But one has to take into account that Beijing will need to be consulted, and it makes sense that this would happen after the public consultation produced a final version of the proposal.
Those who participated in the previous international call for tenders remember the complexity of the process, starting for example with the need to translate hundreds of articles (minutes, notifications, proposals, etc.). In another example, it was necessary to consider assessments of the competence and capacity of competing groups.
Sources consulted by Macau Affairs say the process could take six months, which points to the end of June.
One thing to keep in mind: the 2001 tender was not the subject of any legal challenge, but there is no guarantee that this public tender will be exempt.
And the government must be protected from such challenges as it signs the new concessions – imagine what would happen if a court ruled in favor of a hypothetical appeal?
The postponement therefore seems increasingly inevitable: one could argue that there is a broad consensus on the inevitability of rescheduling among local lawyers, industry experts and even the Macau Games and Entertainment Mediators Association.
“For the open tender to happen, Macau needs to hold a public consultation (previously scheduled for the second half of 2020) and then submit the new law to the Legislature (the draft is not yet ready), which could take more than a year, “investment bank Morgan Stanley noted last December, suggesting that a three-year concession extension was” likely. “
Even so, there is still a year to go, and as Ben Lee, Head of IGamiX Management & Consulting admits, theoretically the bidding can still take place, given that “the previous bidding process current only took three months: from the announcement of the call from November to February when the winners were announced. In theory, Mr. Lee says Macau Affairs, “The same timetable could apply, but it all depends on how quickly the public consultation is conducted and the new gaming legislation enacted in the second half of this year.
António Lobo Vilela, former adviser to the secretary for economy and finance and author of Macau Gaming Law book, was deeply involved in the 2001 public tender and over the following years as senior legal advisor to the Macau Gaming Commission.
After the publication of Law 16/2001 on September 24, “we opened the public tender five weeks later (November 1)”, setting December 7 as the deadline for the submission of bids by bidders. “The public tender culminated with the signing of the Wynn and Galaxy concession contracts almost seven months later (June 24, 2002). The 2001 public tender was a success because it went off without incident. However, it took almost 8 months (9 months from the publication of Law 16/2001) for everything to be done.
This means that everyone is waiting for the government.
However, the last time Ho Iat Seng raised the issue, in December, he conceded the possibility of extending the licenses without giving any certainty: “The extension of concessions is a sensitive subject, so I will not comment. . Anything is possible, but we have to follow the procedures.
It was the first time that the chief executive recognized this possibility, since the official line – drawn in a speech of his predecessor – is that of the international public tender.
Last October, by the way, Secretary Lei Wai Nong said that local authorities do not plan to delay the future public tender for gaming concessions beyond 2022: We are already in the phase of preparation and we have to take into account many technical issues. A few weeks later, the same official added that the government would continue “the work to open calls for tenders for new concessions for the allocation of gambling concessions.”
And the studies ?
In 2017, the section on the study of moderate economic diversification policies of the Economic Development Council commissioned two universities to carry out a quantitative analysis on the moderate scale of the gaming industry from the point of view of “the economy and of Macao society “and” the healthy development of industry and regional competition.
Both studies were commissioned from the University of Macao (Quantitative Analysis on Exploring the Moderate Scale of Gaming Industry 2020-2030 from Macau Social and Economic Aspects) and Macao University of Science and Technology (Quantitative analysis on the exploration of the moderate scale of the gaming industry 2020-2030 from the point of view of the healthy development of the industry and regional competition), but they were never made public.
“The relevant reports have been completed and sent to the relevant government departments for internal reference,” the Macao Economic and Technological Development Bureau said. Macau Affairs.
Three years or seven years?
“The extension makes sense: for the government to gain time and critical mass, as well as for local consultations,” says Jorge Costa Oliveira, former commissioner for gaming affairs at the Macau Gaming Commission.
“But I see the scenario of three more years, as has been said, with trepidation, because it will coincide with the end of the electoral process to choose the next EC. If an extension is justified, it is probably wiser for the government to make a proposal to amend Law 16/2001, for example indicating the possibility of extending the duration of concessions to seven years rather than five, ”said Mr. Oliveira. Macau Affairs.
António Lobo Vilela considers that five years is the right time to coincide with the terms of each CEO: “It seems unthinkable that the current CEO would have the latitude to grant a new term of 20 years (or similar) at some point. . where his second term is about to end, ”Vilela wrote in 2014 – a position he recently reaffirmed for Macau Affairs.
Public consultation, “nonsense”
António Lobo Vilela, until December 2020 advisor to the Secretary of the Economy and Finance, considers the government’s plan for a public consultation on the law on games as “nonsense”. “On what will the population be consulted? Public policy? If they want to play in town? What criteria for the award of concessions should be included in the amendment to Law 16/2001? The ceiling, if any, on the number of casino concessions to be granted? Should a casino concession be granted to casino sub-concessionaires? Replacing casino concessions with casino licenses? Allow casino dealers to operate other types of games, such as interactive games or pari-mutuel? Adjustment of the gambling tax rate (and other contributions)? Grant satellite casinos a casino concession / license? Consideration of a new maximum duration for new casino concessions? Should the CEO’s ten percent stake in the share capital be retained by the citizens of Macao? Should the government approve an administrative offense regulation so that fines can be imposed on casino operators? He asks, pointing out to Macau Affairs that “the norm would be to consult the actors of the gaming industry, those who can really make a positive and valuable contribution to the amendment of Law 16/2001”.