The seven companies bidding for Macau gaming concessions under the government’s re-tender recently held three meetings with the Macau Gambling Tender Committee, where they discussed the pandemic, land use and staff salaries. But a local scholar told Inside Asian Gaming that the government’s demands on the tender companies are “out of touch” with the actual situation.
This after global investment bank Credit Suisse suggested last week that the Macau government had asked the tenderers to further increase their investment in non-gaming elements at their respective integrated resorts.
TDM – Rádio Macau also reported that the government had asked tenderers to give a timetable for their investment, including the amount of money to be invested each year. However, the bidding companies are said to be “skeptical” of the government’s plan and asked for more clarity on the timing of Macau’s border restrictions being permanently eased.
In addition, IAG has received information that some of the concessionaires discussed with the government the issue of employee salaries at the meetings, with many pushing to reduce salaries once they have been awarded new 10-year concessions.
In response to questions around these matters, the chairman of the Macau Gambling Tender Committee and Macau’s Secretary for Administration and Justice, Cheong Weng Chon, said Friday, “The government is under an obligation of confidentiality and will not disclose anything.”
In an interview with IAG, Eilo Wing-Yat Yu, associate professor of the Department of Government and Public Administration of the University of Macau, said, “From the news, the government is a bit out of touch with the actual situation, and it shows that there is confusion in the government’s thinking.”
Among other things, since Macau has followed China’s zero-COVID policy, it is still unknown when Macau will be opened up to the outside world, yet the government is asking the new concessionaires to develop foreign markets.
“Although the Chief Executive has pointed out that it is a long-term goal to attract foreign visitors, the government has not given a clear indication of when it will reopen the city but has asked the concessionaires to increase the amount of investment,” said Eilo Yu. “This will make investors doubt whether the increased investment can yield a return.
“The government’s request is clearly out of step with the actual situation as the bidding companies are not expecting too much return on their investment in an uncertain economic environment.”
The president of the Macau Responsible Gaming Association, Song Wai Kit, spoke with IAG about the issue of staff salaries but suggested there was no contradiction between the bidding companies and the government. Instead, he said each had different considerations, with the bidders engaged in business with a view to profits while the government’s direction is to consider the overall interests of Macau.
“It’s not surprising that some companies have put forward this idea (reducing salaries) because they have to be accountable to their shareholders and stockholders, and in this economic environment, it’s not surprising that they have such a demand,” he said.
