Roundup: Macao Casinos Step Into New Era

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Last updated at: (Beijing Time) Monday, April 01, 2002

Roundup: Macao Casinos Step Into New Era

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Three Applicants

In Macao, the gambling industry of world renown will be open for competition as of Monday after the 40-year monopoly of the Macao Tourism and Amusement Company (STDM) over the market ended officially on March 31.

The Macao Gaming Company (SJM), a new firm of which the STDM is still its parent company and casino magnate Stanley Ho is the managing director, took over Macao's gaming assets -- 11 casinos, at zero o'clock Monday following a smooth transfer ceremony.

The SJM became one of the three successful applicants for casino licences after months of bidding ended February 8, and signed a contract with the special administrative region (SAR) government for an 18-year concession in casino operation a couple of days ago.

Las Vegas-backed Wynn Resorts (Macao) Limited and Galaxy Casino Company Limited, a Hong Kong-Macao joint venture -- the other two winners -- are still negotiating with the SAR government demanding preferential treatment prior to clinching agreements.

SJM to retain all STDM staff

Stanley Ho has promised that the SJM will retain all casino staff of the STDM. "For the time being, we will remain unchanged," he told the press.

Witnesses said that some of the casino employees had already swapped for new suits with special SJM badges.

Macao casinos stopped for just a few minutes when the SJM-STDM transfer ceremony was held at the well-known Lisboa Hotel last night and then resumed operation.

SJM's payment

A big difference is that the SJM will pay casino tax that accounts for 35 percent of its gross gaming revenue, up from 31.8 percent by the STDM by the end of March 31.

In line with a contract, the SJM also bears financial liabilities including an annual payment of 1.6 percent of its gross revenue to a public foundation for promotion and development of cultural, social, economic, educational, scientific and charity activities and an annual spending of 1.4 percent of the revenue on urban development and promotion of tourism and social order, on top of the 35 percent casino tax.

In addition, the concessionaire is liable for an annual premium of 30 million patacas (3.75 million U.S. dollars) plus a variable amount generated from the number of gaming tables and machinery such as slot machines.

Stanley Ho has posted to spend 4.7 billion patacas (587.5 million dollars) in upgrading his flagship Lisboa Hotel, getting involved in construction of the Fisherman's Wharf, building an amusement park and revamping old urban areas in the coming five years.

After his STDM won the concession in casino management in Macao in 1962, Stanley Ho introduced successful experience from abroad, ran casinos around the clock, kept upgrading service and built a series of auxiliary tourist facilities such as the Hong Kong-Macao terminal, in an effort to promote Macao's status known as the " Oriental Monte Carlo".

Macao's History of Gambling Industry

Macao had a history of more than 150 years in gambling. As early as 1847, a decree was enacted for franchised gambling business in Macao. In 1961 the then government publicly sought concession for the gambling industry.

Seen as a bold move to optimize the industry, the SAR government proposed open competition in the gambling market two years ago, posted rules on tenders last October and accepted 21 bidding papers in November, bringing in cut-throat competition among the bidders including those from world famous casinos.

Casinos now contribute to roughly 30 percent of Macao's gross domestic product and employ more than 10,000 local residents.

Related News: Monopoly on Macao's Gambling Industry to End

A total of 21 companies will bid for three new licenses of casinos in China's Macao Special Administrative Region (SAR).

The SAR government has accepted all the bidders, but some of the companies will have to add more documents to their bidding papers, according to Francis Tam Pak Yuen, secretary for economy and finance of the SAR government.

The move will put an end to the 40-year monopoly of the Macao Tourism and Amusement Company (STDM) in the city's gambling sector,as part of the efforts of local government to further upgrade casino management and promote economic expansion.

However, the STDM's business contract with the SAR government will have to be prolonged for three more months, from December 31,2001 to March 31, 2002, to allow the government enough time to assess the bidding qualification of the competitors, Tam said.

The authorities noted that none of the bidders are Chinese-funded companies.

Casinos should contribute to tourism and economic development and social stability in Macao, in line with the Gaming Industrial Regime which was passed by the Legislative Assembly in August.

Casino managers and operators should be qualified and honest and responsible for their doing, the law says.

In addition, taxation from casinos should make up 35 percent oftheir gross revenues.

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