The "Interim Review of Gaming Liberalization for Games of
Fortune" Research Report released today
Office of the Secretary for Economy and Finance
Press Release
11 May 2016
The “Interim Review
of Gaming Liberalization for Games of Fortune in Macao:
economical, social, livelihood impacts and operating
conditions of the Concessionaires” research report is
released today (11 May). The study covered nine research
topics in four categories, including the contractual and
operating conditions of Concessionaires and
Subconcessionaires; economical, social and livelihood
impacts of the development of the gaming industry; and
current situation of junket promoters. After analysing the
relevant data and statistics, the research team concluded
that the six gaming operators have all fulfilled the capital
commitment in their contracts. Development of the gaming
industry has obviously created positive impact on the
economy and society of Macao and at the same time negative
impact. Proportion of local employees in gaming operators is
much higher than that of overseas employees. Non-compliance
in a number of areas also showed a downward trend.
Office of the
Secretary for Economy and Finance commissioned the Institute
for the Study of Commercial Gaming, University of Macau to
conduct a research titled “Interim Review of Gaming
Liberalization for Games of Fortune in Macao: economical,
social, livelihood impacts and operating conditions of the
Concessionaires”, in order to have a comprehensive review of
the implementation of gaming concessions and to analyse the
level of impact that the development of the gaming industry
had on the local economy, business environment for small and
medium-sized enterprises (SMEs), as well as to the society
and the public. It also studied the synergetic effect
between gaming and non-gaming elements, as well as the
development and current situation of junket promoters since
gaming liberalization. The research will help review the
operating conditions of the gaming industry in Macao and the
fulfilment of corporate social responsibility by the gaming
operators, which will be an important reference for further
improvement of gaming laws, regulations and regulatory
framework to promote quality and integrity in gaming
operations, and in turn its healthy development.
One of the core
research directions was to collate and analyze the
fulfilment of contracts and their operating conditions by
Concessionaires and Subconcessionaires (including the
fulfilment of the contract, operating conditions, social
responsibility and compliance status). The report
stated that the six gaming operators have all fulfilled the
capital commitment in their contracts. Majority of their
employees were in the gaming field, the overall proportion
of local employees is much higher than that of overseas
employees. Besides, all of the six gaming operators provided
opportunities for upward and lateral mobility to their
employees, in which the proportion of local employees of
managerial grade or above increased from around 60% in 2008
to 80% in 2014. Research analysis was also conducted on
various areas such as the gaming operator's number of
employees, upward and lateral mobility situation, changes in
salary and training.
Analysis of
the research shown that the development of the gaming
industry had positive impact on Macao's society and economy
and synergetic effect was found alongside the gaming and
non-gaming elements. Nonetheless, negative impact such as
pushing up the inflation rate, housing prices and business
operating costs, creating crowding out effects on SMEs and
affecting social values were created, which need to be
continuously monitored and dealt with. Despite the positive
role of junket promoters in the development process of the
gaming industry, there are still bound to be problematic
areas which needs stronger regulatory effort in order to
enable a healthy and orderly development of the industry.
In terms of
compliance status, the number of non-compliance cases in the
six gaming operators shown a downward trend. Cases of
non-compliance include internal control and reporting
deficiencies in prevention of money laundering and terrorist
financing; execution of “Minimum Internal Control
Requirements” and “Guidelines on Responsible Gambling ”.
As assessment
of corporate social responsibility varies in different
places, therefore, when the research team evaluates the
fulfilment of corporate social responsibility by the six
gaming operators in Macao, the first criteria lies on the
demands of the local community towards the gaming
corporations, such as: transportation/accommodation
arrangements for overseas employees, supporting SMEs, local
procurement and development of non-gaming elements, etc. In
addition, the research team has also referred to common
international assessment criteria and selected consumer
issues and social engagement & development as the two
assessment topics for comparison. Analysis shown that all of
the six gaming operators had transportation arrangement for
their employees. They had also established mechanisms to
handle consumer issues. Several gaming operators have
supported SMEs by giving priority to local SMEs in
procurement of services or products.
Table:
Fulfillment of
capital commitments
in gaming concession
and subconcession contracts
Company Name |
Capital amount in
concession and subconcession contract |
Committed period of
capital expenditure |
Date of signing the
concession and subconcession contract |
Actual capital
expenditure in committed period (within 7 years) |
Fulfillment Status of
capital commitments in concession and subconcession
contract |
(Million MOP) |
(Million MOP) |
Sociedade de Jogos de
Macau S.A. |
4,737 |
Must be expended within 7
years from the concession contract date
|
28/3/2002 |
11,527 |
Completed |
Wynn Resorts (Macau)
S.A. |
4,000 |
Must be expended within 7
years from the concession contract date |
24/6/2002 |
12,607 |
Completed |
Galaxy Casino, S.A. |
8,800 |
Must be expended within 7
years from the concession contract date |
26/6/2002
|
7,588* |
Completed |
Venetian Macau, S.A. |
4,400 |
Must be expended within 7
years from the subconcession contract date |
19/12/2002 |
53,501 |
Completed |
MGM Grand Paradise, S.A. |
4,000 |
Must be expended within 7
years from the subconcession contract date |
19/4/2005 |
10,267 |
Completed |
Melco Crown (Macau), S.A. |
4,000 |
Must be expended within 7
years from the subconcession contract date |
8/9/2006 |
42,322 |
Completed |
|
Source: Annex to the concession and subconcession contracts
(investment plan); Actual capital amounts were provided by
the DICJ (DICJ provided the annual actual capital
expenditure, which the research team converted into pro-rata
daily actual capital expenditure for calculation purpose).
NOTE: The actual capital expenditure of Galaxy Casino, S.A.
within 7 years from the date of the contract
(26/6/2002-26/6/2009) was only 7.588 billion MOP, which is
less than the required capital amount in the concession
contract (8.8 billion MOP). However, according to the
subconcession contract between Galaxy Casino, S.A. and
Venetian Macau, S.A., part of the items in Galaxy’s original
investment plan has been transferred to Venetian. Thus,
according to the agreement, capital expenditure of the
latter was calculated into the total capital amount of the
former, with a limit of 4.4 billion MOP. For detailed
explanation, please refer to the research report (Investment
Plan in Concession and Subconcession contracts). Thus,
Galaxy has fulfilled the committed capital requirement in
the concession contract. |
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