Macau’s Gaming Inspection and Coordination Bureau has moved to address concerns over a proposed increase in the concession share capital required to be held by a Macau local Executive Director, heavily implying any such revision to the Macau gaming law would not stray from the current application.
Under Macau’s current gaming law, each concessionaire or approved casino management company is required to have an Executive Director, who must possess a Macau permanent ID card. This Executive Director must hold at least 10% of the share capital of the concessionaire. As it currently stands, that holding need not be one of economic interest or voting control, and can be held for the benefit of a parent company or other entity overseeing each concessionaire.
Investors had expressed concern over the government’s intentions in relation to this holding after the DICJ revealed last month that one of the revisions to Macau’s gaming law currently being considered is an increase in Executive Director holding. IAG understands that these investor concerns centered not only around an increase in the 10% threshold, but the possibility that the nature of the holding may change to be compulsorily one of economic and/or voting interest. This would potentially give rise to triggering “change of control” covenants with banks and/or other lenders, causing difficulties around the financing of Macau’s concessionaires.
However, in response to multiple questions on the subject fielded at a fourth and final public consultation session held Monday, from IAG and no less than three Portuguese lawyers, DICJ Subdirector Lio Chi Chong expressed exasperation, seemingly adamant that there would be no practical change in the application of the share capital law, even if the percentage itself may be increased.
“This 10% is already regulated in the current gaming law,” Subdirector Lio explained.
“Regarding this, the current gaming law regulates two things. First, the shareholder needs to hold a Macau permanent ID card, and second, the percentage of the shareholding needs to be 10%.
“In the future, we want to increase the percentage to more than 10% so we are asking the public for their opinions on what percentage we should increase this to.”
In today’s session, Subdirector Lio also said, “Lots of people have been asking about this 10% and I want to emphasize that this rule is already regulated,” heavily implying that there would be no change to the current rules around economic interest and/or voting rights for the shareholding.
As previously reported by Inside Asian Gaming, the DICJ has already moved to allay similar concerns over the potential appointment of a government representative to each of Macau’s casino concessionaires, insisting over the weekend that this would not affect their operations.
Macau’s 45-day public consultation period will close this Friday 29 October.
