Macau gaming law review
It is difficult to comprehend the reasoning behind yesterday’s publication of “draft gaming guidelines”. Perhaps it is not as much the timing, bad enough when the Macau industry is reeling from prolonged Covid restrictions, but the somewhat vague references to issues with less precise statements of solutions which has resulted in the sell-off of shares in the operators.
It is true that the envisaged changes appear to place more onus and liabilities on the operators than previously but, in reality, there is not much new in the announcement although the short timetable for the review and potential enactment will increase nervousness amongst investors. Underground banking and illicit fund transfers have long been in the crosshairs of the PRC government and these controls were always going to be strengthened.
The uncertainty around the “end of sub-concessions” statement is something that needs to be clarified as, like any other business, the gaming industry thrives on certainty. Given the geopolitics which cannot be ignored it is not surprising that investors took fright although the size of the sell-off will have SFC regulators carefully checking the timing of many of the trades as there will inevitably be suspicion that some were forewarned.
In the greater scheme of things, the Macau gaming and hospitality industry is the bedrock of the economy and although there is huge pressure to diversify, neither the Macau nor the PRC government are anything but pragmatic and it is highly unlikely that measures shall negatively impact the industry in the medium to long term. In the short term, those with longer memories will remember the total chaos around the initial licensing that broke the STDM monopoly and realise that the imminent end of the current licensing periods was always going to be disruptive. Of course, disruption also creates opportunities and there are a lot of stories to be told in the near future.
The announcement, as mentioned, is at an unfortunate time but as the battle against Covid hopefully is nearer to being won, real visitation and turnover shall hopefully reveal the new gaming laws to be mere ripples on an incoming tide. Luke Skywalker may prefer the one that is far, far away but I still like the look of our local Galaxy.
