Macau’s senior casino and junket executives on Monday met with authorities in the world’s biggest gambling hub seeking details on proposed regulatory changes, but received little in the way of clarity.
The 70-minute meeting, shown online, highlighted the uncertainty hanging over the industry since the government launched a regulatory overhaul on Tuesday last week. That has sent shares in the hub’s casinos plunging, especially as Macau’s lucrative casino licenses are up for rebidding next year.
The meeting was the only official opportunity for the industry to air its views during the 45-day gaming consultation. It was attended by Sands China Ltd (金沙中國), Wynn Macau Ltd (永利澳門), Galaxy Entertainment Group (銀河娛樂集團), MGM China Holdings Ltd (美高梅中國控股), Melco Resorts and Entertainment Ltd (新濠博亞娛樂) and SJM Holdings Ltd (澳門博彩控股).
Photo: AFP
Macanese authorities have identified nine areas of potential change including having government representatives supervise daily casino operations, the number of licenses, better regulation and employee welfare.
During the meeting, industry executives agreed that Macau’s 20-year gaming law needs to be updated and vouched support for the territory’s development as an international tourism hub.
Galaxy senior vice president for public relations Buddy Lam (林志成) told the meeting that the company wanted more information on several areas, including the introduction of government representatives and clarifications on potential responsibilities and penalties for criminal acts.
The company is confident a “balance could be reached between national interests and the demands of operators,” he said.
Macanese lawyer Rui Cunha (官樂怡), who represented SJM, said that the future license period should take into consideration investments made in the former Portuguese colony.
Junket operators, intermediaries who bring in wealthy big whale Chinese gamblers to Macau, were more vocal, asking for clarity on amendments to criminalize accepting cash deposits, currently a common practice.
Kwok Chi Chung (郭志忠), president of the territory’s junket association, asked how junket practices could be legalized and whether operators could raise capital from the public to help the junket industry have “a better image.”
An unrelenting crackdown by China on capital flight and illicit money transfers has seen junket operators’ portion of Macau’s total gaming revenue slide to about one-third compared with previous highs of about 80 percent.
One key interest of concern is a proposed increase in local directors’ ownership of casino operators, with investors fretting that US casino operators such as Sands, Wynn and MGM face more risk compared with local rivals.
Permanent residents of Macau have a 10 percent voting right in the operators.
“Should that change to an economic right there is a negative perception that Chinese investors may be given a chance to buy these companies at very low prices,” said Louis Lau, director of investments at Brandes Investment Partners LP, which invests in Macau’s casinos.
Sands China has lost about 37 percent in value since last week’s announcement, while Wynn Macau has slid 33 percent and MGM China has tumbled 26 percent.
Authorities are due to hold four more consultations, all with the public, next month.
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