The arrest of Zhou Zhuohua, the founder of Sun City, nicknamed "Ximi Hua", shocked Macau society.
But even if there is no such sudden change in the last month of 2021, Macau's gambling industry is expected to undergo major changes in 2022.
Because the Macau SAR government plans to amend the "Gambling Law", it is recommended to add government representatives and not split the "secondary cards". At present, the six gambling cards of the "three positives and three pairs" will expire at the same time next year. Where to go will make the renewal add more unknowns.
From Hu Wen to Xi Jinping, national leaders have repeatedly hoped that Macau's economy can develop diversified, but Macau still has not been able to get out of its single dependence on the gaming industry. Under the new crown epidemic, last year's economic GDP plummeted by 54%. Broken arm, it is more likely that gambling companies will return gambling cards.
Xi Mihua Storm·Special Page｜The arrest of Zhou Zhuohua in cross-border gambling involving Mainland China leads to changes in Macau's gambling industry
On December 4th, there will be a drone show at the Macau Light Festival.
In the last month of 2021, the arrest of Zhou Zhuohua shocked Macau society. The renewal of Macau gambling in 2022 will attract attention.
(China News Service)
In September, proposed amendments to the gaming law to introduce government representatives
Before Zhou Zhuohua was approved to be arrested by the Mainland and arrested by the police in Macau, this year and next year, Macau's gambling industry has already foreseen major changes.
In September this year, the Macau government announced an amendment to the "Gaming Law" to strengthen the supervision of the gaming industry in nine areas, including restrictions on the number and duration of gambling, strengthening the approval of licensees and intermediaries, and introducing government representatives.
The Sun City VIP Hall was closed for business shortly after Zhou Zhuohua was arrested.
(Profile picture)
Frightened Bird Fear Stack
"Working behind closed doors!" This is the voice of Lin Jiguang, director of the Macau Gaming Industry Management and Intermediary Association.
He believes that the Macau government launched a one-and-a-half-month consultation on law amendments in September, and has not fully communicated with the industry. So far, the general direction and details of the amendments have not been announced, so that gaming companies and stakeholders can only rely on estimates: It will be shocked, and the layers of fear will be superimposed, so that the casino will cut the VIP room, so as not to affect the gambling."
After Zhou Zhuohua was arrested, all Sun City VIP rooms were suspended. After the "Ximihua Case" broke out, there were reports that at least two gambling companies had suspended intermediary VIP rooms since December.
In the consultation document on the amendment, the Macau government stated that it would strengthen the review mechanism for intermediaries and partners. Lin Jiguang said frankly that the government has not yet announced the details, and whether the VIP room can be operated in the future is still unknown.
Lin Jiguang, director of the Macau Gaming Industry Management and Intermediary Association, accepted an interview from "Hong Kong 01" to analyze the case of Zhou Zhuohua, and hoped that the Macau government would release its doubts about gaming intermediaries as soon as possible.
(Photo of Radio Hong Kong)
If mainland tourists can only bring 20,000 yuan
Although the revenue of the VIP room business has declined since 2013, even if it was affected by the epidemic last year, there were still more than 26 billion patacas in revenue, accounting for 40% of Macau's gambling revenue.
Lin pointed out that due to the current restrictions on Macau's land, manpower and transportation facilities, the mass market table games that mainly entertain small-value gamblers and tourists cannot replace the VIP room with gambling revenue. Therefore, the VIP room is still necessary for Macau.
An employee of Zhou Zhuohua's related company, Fazai (pseudonym), also vomited similar worries to the reporter of "Hong Kong 01": "The funds that a mainland resident completely legally brought to Macau were only 20,000 yuan. Based on the 27.9 million mainland tourists visiting Australia in 2019, Even if 20,000 renminbi is used up, it will be 55.8 million renminbi (approximately 70.4 million patacas), which is not a fraction of casino revenue."
The economy has failed to move towards a diversified gambling industry still accounting for half of GDP
From Hu Wen to Xi Jinping, national leaders have repeatedly hoped that Macau's economy can develop diversified, but Macau still has not been able to get out of its single dependence on the gaming industry, except for the closure of customs due to the epidemic in 2020, and from 2012 to 2019, gaming and gaming intermediary industries The ratio of Macau's GDP has been at 50-60%.
In 2015, the Mainland vigorously cracked down on corruption and strictly prevented capital running. Macau’s GDP fell 21.5% that year; by the new crown epidemic last year, Macau’s customs were closed for a long time, and GDP fell even more by 54%; while the neighboring city of Hong Kong, the anti-revision campaign and the impact of the epidemic , Tourists plummeted, and the GDP decline was slight compared to Macau.
The role of intermediary has been reviewed in 2016
In fact, the practice is not without a trace.
In 2016, the Macau government commissioned the Gaming Research Institute of the University of Macau to write the "Interim Review Report on Gaming Operations". Although it affirmed the positive impact of the gaming industry on Macau’s society and economy, it also pointed out that gaming companies have appeared in anti-money laundering and funding terrorism. Cases of insufficient internal control.
One chapter of the report pointed out in more detail that the gaming intermediary system has problems such as low entry barriers, lending, deposits, and illegal gaming activities. The government responded at that time that it would revise regulations.
Xiao Zhicheng, associate professor at the School of Business Administration, University of Macau.
(Photo of University of Macau)
In 2014, the VIP room was reminded of the transformation
Xiao Zhi, an associate professor at the School of Business Administration of the University of Macau, analyzed that the Macau government had been sending out signals to remind intermediaries to correct and transform the VIP room when it carried out in-depth economic adjustments as early as 2014.
However, after Macau’s gambling revenue plummeted in 2015, which led to a 20% drop in GDP, the transformation of gambling halls turned to online gambling. The facts of the Mainland’s indictment even mentioned many major gambling halls in Macau.
He believes that Macau's gambling industry has developed nearly twenty years ago, and there are indeed VIP rooms involved in suspected capital-traveling incidents. Therefore, the central government has formulated a national policy to combat corruption and prevent capital-traveling. It is believed that Macau casinos have low operating transparency and require thorough supervision and transformation."
On November 28, 2021, the police of Macau held a press conference to show the evidence and cash obtained in the Zhou Zhuohua case.
(Xinhua News Agency)
Strong man with broken arm?
However, Xiao Zhicheng does not agree that the central government has deliberately used policies to suppress the development of the gambling industry. Instead, it wants to end Macau's consumption growth in the past two decades: "This is an inevitable step for the long-term and healthy development of the gambling industry."
The reorganization of the VIP room will undoubtedly bring a major blow to Aoming's gambling revenue, but Xiao Zhicheng believes that "there is danger and it is organic."
Under the influence of the epidemic, Macau's gambling industry has reduced its gambling revenue in the past two years. He believes that the current amendment is like a "severe arm". After the gambling industry has returned to a healthy business model, it has slowly and steadily increased with the economic recovery: "There must be an impact in the short term. , But the long-term impact is not significant."
The six major gambling cards will expire in 2022, and the gambling industry will change.
The picture shows the flag-raising ceremony for 22 years of Macao's return on December 20, 2021.
(Xinhua News Agency)
Xiao Zhicheng agrees that the operating restrictions of mass market table games prevent its gambling revenue from catching up with VIP rooms, but believes that the target group of mass market table games in the future, from small gamblers to mid-to-high-end mass market customers, can still be improved Gamble.
However, he also said frankly that it would take ten years for Macau to return to its peak of gambling revenue of nearly 300 billion patacas a year after the law was amended.
He also believes that the revised law has a more obvious impact on intermediaries, but he believes that after the rectification, gaming companies can still continue to operate VIP rooms commonly known as "company halls."
Stanley Ho obtained the exclusive franchise of Macau's gambling industry in the 1960s until 2001 when Macau issued new gambling cards.
He passed away in 2020.
(Information Picture/Photographed by Chen Shunzhen)
In 2001, three gambling cards were issued and the second card was removed
The current "Gaming Law" has been implemented since 2001, and the Macau government approved three gambling cards the following year to Galaxy Entertainment (0027), Wynn Macau (1128) and SJM (0880) subsidiaries.
Later, due to the two major shareholders of GEG requesting to split the gambling licenses, the government approved the split of the gambling licenses in the form of "sub-licensing". The situation of three "decks".
The licenses of the six major gambling companies will expire in June next year and will need to re-bid for gambling.
The government is currently amending the law to limit the number of gambling cards, and it has pointed out that it will also prohibit "sub-license", that is, the "secondary card" situation that has been maintained for many years will come to an end.
"Managing Health" and "Managing Death"
Lin Jiguang pointed out that for the time being, he still believes that the Macau government will maintain the current number of gambling licenses to stabilize the industry. He also estimated that the government will extend the licenses of the six major gaming companies until the completion of the legal amendment process.
He pointed out that if the government's regulation is "excessive" after the regulation is amended, it will make it difficult for gambling companies to develop. It is not ruled out that gambling companies will give up gambling. "Managing life" or "controlling death".
However, scholar Xiao Zhicheng believes that the government is now proposing to join government representatives to monitor gambling enterprises, which is similar to the public industry. Controversial industry."
On November 27, 2021, the Macao police arrested Zhou Zhuohua and a total of 11 people.
(Xinhua News Agency)
Where do US-funded gambling companies go under the Sino-US game
In the consultation on the amendment of the law, the Macau government also proposed to strengthen the approval of licensees and appoint a Macau managing director to increase the proportion of company capital held by Macau.
Among the current six major gambling companies, Wynn, who holds the “general license,” and the Venetian and MGM holding the “second license,” are all US-funded gambling companies. Under the current situation of stalemate in Sino-US relations, there are voices from outside who believe that the revision of the law may Targeting US-owned casinos will even make it impossible for these gaming companies to renew their licenses.
The closure of the epidemic caused a 54% drop in Macau's GDP in 2020.
(Xinhua News Agency)
Xiao Zhicheng believes that the relevant statement is an over-interpretation of the outside world: "The government just hopes that Macau's business groups increase their shareholding, which will make an indirect contribution to social welfare."
In fact, the CEOs of Wynn and The Venetian have expressed confidence in the prospects of operating in Macau on the amendments to the Gaming Law. The suggestion is not surprising, and speaking out is nothing new.
The Sun City VIP Lounge was once the leading gaming intermediary in Macau.
(Reuters)
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