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Granting of gaming concessions by open tender: Leong

Secretary for Economy and FinanceLeong Vai Tac reaffirmed in the legislature’s hemicycle Monday that the government plans to launch an open tender process for the granting of future gaming concessions, in the run-up to the expiration of the city’s three gaming concessions and three sub-concessions.

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UPDATED: 22 Dec 2023, 5:49 am

Secretary for Economy and FinanceLeong Vai Tac reaffirmed in the legislature’s hemicycle Monday that the government plans to launch an open tender process for the granting of future gaming concessions, in the run-up to the expiration of the city’s three gaming concessions and three sub-concessions.

Leong made the remarks when answering questions from several lawmakers, on the first day of a two-day Q&A session about his portfolio’s policy guidelines for next year.

The city’s six gaming operators are SJM, Wynn, Galaxy, Venetian, MGM and Melco. While SJM, Wynn and Galaxy are concessionaires, the Venetian, MGM and Melco are sub-concessionaires. The SJM concession and its sub-concession MGM will expire in 2020, while the others will expire in 2022.

According to Law 16/2001 regulating the city’s gaming industry, which came into force in 2001, a maximum of three gaming concessions were to be granted.

The government announced the results of the gaming concession bidding process and granted concessions to SJM, Wynn and Galaxy in early 2002.

In late 2002, the government allowed Galaxy to set up a sub-concession relationship with the Venetian – by amending Galaxy’s concession contract.

Following the issuing of the first sub-concession, SJM and Wynn signed their own sub-concession deals in 2005 and 2006 respectively, SJM with MGM, and Wynn with Melco.

According to Law 16/2001, a gaming concession cannot exceed 20 years. The government has repeatedly noted that, however, the gaming industry law allows the chief executive to extend gaming concessions for a maximum of five years under special circumstances.

Since last year, the government has repeatedly reaffirmed that once the gaming concessions and sub-concessions expire, a bidding process will be held rather than the government simply renewing the existing agreements.

During yesterday’s plenary session, non-establishment directly-elected lawmaker Au Kam San said that Macau’s civil society was paying close attention to the way the government would grant new gaming concessions, bearing in mind that the city’s three gaming concessions and three sub-concessions are slated to expire between 2020 and 2022.

Au criticised Leong for having repeatedly evaded directly answering media’s questions about how the government will carry out its upcoming gaming concession bidding process. According to Au, Leong has told the local media that it was still not the right time for the government to reveal its proposal for the upcoming gaming concession bidding process as any premature announcement on the matter would negatively affect the competitiveness of Macau’s gaming industry in the future.

Au said that he disagreed with the government’s stance of still not announcing its decisions on the city’s upcoming gaming concession bidding process. He said that gaming concession bidding was a crucially important matter to Macau’s economy and that the city’s gaming industry involves tens of thousands of employees. The lawmaker said that an earlier release of information by the government on how it plans to carry out the upcoming bidding process would enable existing gaming operators to start planning to bid for new gaming concessions, while newcomers could start planning to bid for new gaming concessions.

During the plenary session, Leong reaffirmed that according to the gaming industry law, the chief executive – by granting an exemption and specifying the reasons for his decision – is allowed to extend a particular gaming concession upon its expiration, for one time or multiple times, for a maximum of a total of five years.

Leong, who oversees the city’s vitally important gaming industry, said that the government would tackle the issue of the upcoming expiration of gaming concessions in line with two major principles, namely helping Macau develop into a world tourism and leisure centre, and allowing Macau’s gaming industry to remain regionally competitive.

Leong also noted that the upcoming gaming concession bidding process would require the government to submit a new bill on the city’s gaming industry to the legislature.

Addressing a press conference about his 2019 Policy Address earlier this month, Chief Executive Fernando Chui Sai On revealed that the government would launch the gaming concession bidding process before 2022 while it was currently studying how to tackle the issue concerning the expiration of one gaming concession (SJM) and one sub-concession (MGM) in 2020.

Chui’s term ends on December 19, 2019.

UPDATED: 22 Dec 2023, 5:49 am

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