All operators to get Cotai plots: Tam

Wynn Macau is still waiting to move into Cotai – just like SJM and MGM China – but secretary Francis Tam said all three firms will get a casino plot, but did not provide a timetable

The secretary for Economy and Finance has confirmed that the government is planning to grant a plot for casino development in the Cotai area to all of the six gaming operators.
During his Policy Address at the Legislative Assembly, which ended yesterday, Francis Tam Pak Yuen also defended the decision to set a three-percent growth cap on gaming tables between 2013 and 2023.
“There are reasons for this figure. We don’t want this sector to grow too much, too fast,” he said. The official recalled that concession contracts were signed for a period of 20 years. “We are halfway there now so it’s the right timing to stop and look back,” he said.
Gaming has gone through “a very fast development” which has in turn boost the growth of local economy, Tam conceded. But “all opinions point towards a certain control of the sector’s development,” he warned.
There will be a hard cap of 5,500 tables until 2013, followed by a three-percent growth cap for the following decade. “We will have about 2,000 more tables and if it happens gradually it’s likely the society will be able to accept it,” the secretary explained.
Imposing harsher restrictions on the number of gaming tables “would not allow companies to open the new casinos planned for Cotai,” he stressed. For instance, Tam added, “it would be very difficult for them to attract investment” if there were no available tables for new resorts.
Sands China, Galaxy Entertainment and Melco Crown are already operating in Cotai but the three remaining operators – SJM, MGM China and Wynn Macau – are still waiting for their turn.
In September, Wynn Macau announced that they agreed to pay a MOP 1.55 billion government premium for a plot of land in Cotai next to City of Dreams resort and the Macau University of Science and Technology campus. But the government immediately said Wynn’s request “was currently being reviewed and the Administration has yet to make a final decision”.
Tam’s pledge was not welcomed by lawmaker Au Kam San, who called on the secretary to launch open tenders for the available Cotai plots. The lawmaker accused the government of “protecting the gaming operators” at the expense of local companies.
The pan-democrat also asked Francis Tam to finally remove gaming parlours from residential districts, a measure once again included in the 2012 Policy Adress.

Pragmatic opening

Further restrictions would also pose a danger to the local economy, Tam warned. “If we were to stop the gaming sector from developing, we would have a risky economic environment. There would be consequences for the Macau society,” he said.
The goal is to maintain a “disciplined” development pace that is both “acceptable for the population” and allows the gaming industry to “remain the engine of the economic development,” the secretary said.
But lawmaker Lee Chong Cheng criticised the possible liberalisation of sports betting, claiming it “would contradict the gaming growth control”.
Francis Tam downplayed the concerns, saying to open up the sports betting market was “a worldwide trend in which Macau cannot be left behind. “It doesn’t mean we will have to do it at once but we will have to get ready for this.”
“We can’t ignore the gaming sector’s contribution for economy. Perhaps with economic diversification we will be able to have a new perspective,” he added.
In the future, Tam reiterated, “we want gaming to be just one element of a world-class tourism and leisure destination. But in the short-term gaming will have to continue dominating the economy.”
Adequate diversification will have come “in a pragmatic perspective,” he stressed, and it “will always focus on services”. And even casino developers “have taken up their responsibility in diversification,” the official said.
“Many operators are already making a profit from non-gaming activities, such as hotel, retail, restaurants,” he added. Tam believes this is a sign that even private companies can see reasons to bet on other business areas.

MICE warning

One of the areas on which the government is betting heavily is the Meetings, Incentives, Conventions and Exhibitions (MICE) industry. However the number of events and participants has decreased in the first half of this year.
The government should build a public MICE venue, like in neighbouring Hong Kong, lawmaker Vítor Cheung Lup Kwan said, to offer other alternatives to Venetian Macao resort.
A logistics centre would also help to move goods and supplies for the MICE business, as well as for the hospitality and restaurant industries, Ng Kuok Cheong said. “I hope there will be a plot reserved in the new reclaimed land for this purpose,” the lawmaker said.
But the Administration prefers to look at the broader picture. “We are happy, mostly with the creation of local companies able to provide related services to the MICE business,” Francis Tam said.
“There is already a strong foundation for the next step,” he added, which must be for the sector to grow out of public protection.
“Major events have been organised in Macau in the last few years, with the support of the government,” the secretary recalled. “We won’t stop helping until this sector is able to hold its own in the region.”
“But in the long-term this sector must grow in the market and stand alone, making the most of its advantages, or else it won’t become a healthy business,” he warned.