Inside Asian Gaming

INSIDE ASIAN GAMING | October 2011 38 Macau Policy W hy do the Macau authorities and the foreign gaming companies so often seem to end up talking past each other rather than to each other in the discussion of the industry’s future? When discussing that topic, it’s generally not helpful to think only in stereotypes. The typical stereotype from the Chinese side is that Western operators bring the mind-set of their domestic business practices with them when they come to Macau and other parts of Asia and are not sufficiently respectful or understanding that local practices might be different. The Western stereotype about the Macau government is that it’s somewhat lacking in administrative experience and sometimes lacking in coherence on policy-making. That can lead to different branches of government giving conflicting signals from one moment to the next, goes the Western-generated stereotype. An alternative reading is that there is no ‘good guy’ or ‘bad guy’ in this situation and that it’s principally a function of miscommunication. Despite the surface similarities between the human beings from the operator and government sides that make up this dialogue—people wearing smart suits, designer glasses and carrying smartphones—the cultural differences between them really are profound. Those differences are such that even in translation, what Party ‘A’ says and what Party ‘B’ thinks it hears can be very different. And that can happen even if—like Wynn Macau—the casino operator concerned has at least one Chinese executive at very senior level. By that reading, it’s a wonder there aren’t more misunderstandings than actually do occur. There’s been a perception outside the territory (vocalised also occasionally by some Macau insiders) that prior to casino market liberalisation in 2002—and even for some years after that— the place was run almost as a private fiefdom by a handful of influential families with business interests in every key sector of the economy. For a while, goes that reading, this level of nod-and- a-wink government cooperation was also extended to Macau’s emerging new gaming industry. This was on the understanding that the industry would show its ‘gratitude’ in the traditional manner when the time came— i.e. by being suitably publicly respectful to Macau’s hereditary powerbrokers and by privately giving ground on important issues when the government found the political need for that. But there was a problem. That’s not generally how business is done in the West. There, any yielding on a rule or any other form of latitude by government is often perceived as weakness and as a cue for business to press for even more. The fact that the casino operators haven’t always ‘bought in’ or at least maintained their side of this implied social contract on offer from the government is not necessarily due to bloody-mindedness. The two sides sometimes have conflicting needs. The pressure on the Macau casino operators—in common with all public listed companies— is to get the good news on things such as construction permissions and regulations out there as soon as possible in order to support the share price and reinforce investor confidence. The pressure on the Macau government is to be seen as maintaining the dignity of not only Macau sovereignty but Chinese national sovereignty over what foreign investment is made in the territory. That, in essence, means doing things at whatever pace and whatever format is comfortable for the government. Dignity is an intangible thing. It’s whatever a person or a public body perceives it to be. Perhaps if the Macau SAR government had been around for more than 12 years it wouldn’t feel under such pressure on this issue and wouldn’t feel such a strong need to stand on its dignity. That dignity would be assumed and unspoken. But we are where we are. And the foreign operators haven’t always helped themselves in this regard. In the face of constant indicators from the Macau authorities on what cards to play and when to play them, operators have on occasion tried to play the cards THEY prefer—regardless. In other words, they tried to get local reality to conform to their idea of how things should be. That rarely brings satisfaction for anyone involved. Errors—But Not Much Comedy The East-West culture gap can catch even the smart operators unawares Early days—Macau’s administration is still feeling its way since the December 1999 handover