Inside Asian Gaming

INSIDE ASIAN GAMING AUGUST 2018 32 COLUMNISTS from the gaming industry, compared to less than 50% during the handover in 1999. The regional casino and tourism environment has changed enormously in the two decades since the liberalization of Macau’s gaming industry. Chinese tourists, now so crucial to Macau’s casino tourism success, have multiple destination choices available to them compared to the 1990s when Macau and Hong Kong became Special Administrative Regions (SARs) of the People’s Republic of China in 1997 and 1999 respectively. These two SARs were the first to be granted “approved destination status (ADS)” permitting increased Chinese visitation. But integrated resorts are now part of the tourism scene in Singapore, the Philippines and Vietnam, with Japan also having just passed legislation to establish integrated resort development aimed at stimulating tourism. Undoubtedly Macau will remain the key Asian location for integrated resort development based on casino revenues, but the question is: What will the Cotai Strip look like in 2020 and beyond? It is a process that must be strategically planned and managed through appropriate policy, again accentuating the importance of the terms contained within the new casino contracts. While some casino concessions will expire a few years before others, it is most likely that the Macau Government will extend SJM and MGM’s licenses, which expire in 2020, until 2022 to fall in line with the other four. The new contract renewals will take place under the rule of Macau’s next Chief Executive, whose term will begin after 20 December 2019. In the meantime, speculation is starting to grow as to the possible terms and conditions to be contained in the government’s new gaming contracts. Interlinked within this will be the various weighted criteria for the “request for proposals” which the government will use to award the new casino concession contracts. The outcomes of these will obviously impact the future of the Cotai Strip and how it is positioned within the Greater Bay Area. The squeezing out of other major industries due to the huge financial impact of the gaming industry in the past 20 years has meant that Macau’s major diversification has all been tourism and hospitality related and therefore reliant on the casino companies.