Pressure already on for incoming Macau chief
Posted by Gavin Smith on 25 Jun 2009 at 23:06
Pressure is already mounting on Macau's leader-in-waiting as the gaming enclave looks to chart a path through the global financial crisis.
Former minister Fernando Chui is now the only candidate to become Macau's next chief executive after cementing support from an election committee, meaning he will step into the hot seat later this year.
Macau has seen rapid growth since the liberalisation of the casino sector in 2002, which brought investment from the likes of large American conglomerates.
But the ex-Portuguese colony also initially felt the pinch of the global financial crisis thanks to its overwhelming reliance on gambling cash.
This was combined with a tightening of visa restrictions for Chinese visitors from the mainland, although there are some reports this could soon be relaxed.
Some high-profile local players have said Macau must broaden its horizons if it is to build a solid future.
Quoted by Reuters, Ambrose So, the CEO of SJM Holdings, said: "For the gambling industry to reach a natural, healthy level you need to invest greater resources so that the economy is more diversified,"
The news agency also said that Mr So believed Chui would not bring in a large number of legislation changes for gaming, but apparently welcomed the idea of more rules for junket operators who now have something of a grip on Macau's VIP market.
Quoted by Reuters, Mr So added: ""We all hope that the new governing team can further regulate the gaming industry, to improve the system,"
The agency's report also noted a spokesman for Chui said it was too early to discuss any new gambling-related rules he might bring in.
Tax is another issue for Chui, and some experts have said he could look to cut Macau's heavy gaming rates of some 39 per cent.
Quoted by Reuters, Aaron Fischer, Asian head of gaming research at CLSA Asia said: "The current casinos are not generating very superior returns,"
"So at the moment, there's very little incentive for the existing casino operators to invest in Macau."
But others have pointed out the need Macau has to spend cash on public projects including transport, warning the authorities may not be inclined to cut back the tax on the lucrative casino market.
