Before Year 2001
Before 1937, no company was granted the monopoly franchise to run casino operations in Macau. Only in 1937, when Kou Ho Neng and Fu Tak Ian formed the “Tai Heng” company and transformed the Central Hotel into a casino, the gaming industry in Macau then started its development and formed its preliminary structure.
The “Tai Heng” company operated in Macau for over 20 years, until 1961 when its monopoly franchise was expired, the gaming license was opened for public bidding. During that time, Stanley Ho, Herry Fok, Ip Tek Lei and Ip Hon jointly formed a company and entered into the competition, which consequently won the bidding and established the Sociedade de Turismo e Diversoes de Macao (STDM). STDM signed the gaming concession contract with the government in June 1962 and the amended contract in July 1987, which subsequently extended the concession to 2001.
After Year 2001
The enactment of Law no. 16/2001 “The Legal Framework for the Operation of Games of Fortune” has brought about tremendous innovations to the Macao gaming industry: the Macau SAR gave out a maximum of 3 gaming licenses for casino operations to increase market competition and attractiveness of the Macao gaming industry, thus boosting the public revenue. The liberalization of the gaming market formally eliminated the monopolistic operation of casino from the Macao history.
The rapid changes of the Macau gaming industry not only attracts inflow of capital from the foreign investors, but also their vision, experience, ability and enthusiasm, which shall develop Macau into a high level and internationally recognized gaming region.
On 7 October 2001, the “Tender Committee of Gaming Concession”, set-up in accordance with the Chief Executive Dispatch no. 216/2001, received 21 bidding papers from various companies with some coming from the U.S., Australia, United Kingdom, Malaysia, Hong Kong and Macau. To select 3 concessionaires out of the 21 companies is compliance with the overall interest of Macao and during the evaluation process, 3 companies are disqualified due to insufficient information, leaving only 18 companies for the interview.
Finally, on 8 February 2002, the Tender Committee promulgated the 3 companies that were granted the gaming concession, namely the Sociedade de Jogos de Macau, S.A. (SJM), Wynn Resorts (Macau) S.A. and Galaxy Casino, S.A.
SJM
The major shareholders are the STDM and Stanley Ho, who signed an 18-year gaming concession contract on 28 March 2002, with contract valid from 1 April 2002 to 31 March 2020.
Currently, the SJM has a total of 12 casinos, with 8 casinos located in the Macau Peninsula and 4 casinos located in the Taipa Island. [Editor: Information as of Year 2003] The casinos in the Macau Peninsula include Casino Lisboa in the Hotel Lisboa, Kam Pek Casino in the “San Kin Yip” Commercial Centre, Mandarin Oriental Casino in the Mandarin Oriental Hotel, Jai Alai Casino in the Jai Alai Building, Kingsway Casino in the Kingsway Hotel, Diamond Casino in the Holiday Inn, Casino Macau Palace (also known as the “Gaming Boat”) and The Legend Club in the Landmark Building; the casinos in the Taipa Island include Casino Taipa in the Hyatt Regency Macau Hotel, New Century Casino in the New Century Hotel, Casino Marina in the Pousada Marina Infante Hotel and MJC Casino in the Grandview Hotel All casinos operate 24 hours a day.
The SJM, aside from installing slot machines in its own 8 casinos, including the Casino Lisboa, Casino Macau Palace, Casino Taipa, Kingsway Casino, New Century Casino, The Legend Club and Casino Marina, it also installed slot machines in the Mocha Slot Lounge in the Hotel Royal Macau, Slot Machine Room in the Canidrome and Treasure Slot Lounge in the Hotel China in Taipa.
On the other hand, the SJM also offers “Tombola” at the Mona Lisa Palace in the Hotel Lisboa every Saturdays, Sundays and on public holidays from 3 to 6 p.m. and “Pachinko” in the Jai Alai Casino everyday at 1 p.m. to 5 a.m.
As of 31 December 2003, the SJM has a total of 166 VIP gaming tables, 258 regular gaming tables, 814 Slot machines and 188 Pachinko.
Wynn Resorts (Macau), S.A
The major shareholders are Steve Wynn and Wong Chi Seng, who signed a 20-year gaming concession contract on 24 June 2002, with contract valid from 27 June 2002 to 26 June 2022.
The concessionaire must invest at least USD 513million (4 billion patacas) over the next seven years and its first mega-resort village should open to the public no later than 2006.
Wynn Resorts (Macau) broke ground on its USD 700 million downtown casino-hotel tower in June 2004. The group will complete by September 2006, a Mediterranean-style flagship resort village on the Outer Harbor New Land Reclamation (NAPE), Taipa Island. This will include a 600-room hotel, a 100,000-square-foot casino, seven restaurants, 28,000 square feet of retail space, a spa, a salon and show rooms and entertainment centers.
Wynn Resorts has contracted with Leighton Contractors (Asia) Ltd., China State Construction Engineering Ltd., Hong Kong, and China Construction Engineering Co. Ltd., Macau, to operate jointly as general contractors for design and construction of the project. A Wynn Macau affiliate will also be responsible for portions of the design.
A major shareholder of Wynn Resorts (Macau) is the Japanese slot machine producer, Kazuo Okada. Okada also plans to build the world’s largest electronic games center in Macau.
Galaxy Casino, S.A
The major shareholders are The Venetian of the U.S. Nevada, Lui Che Woo family and Ho On Chun, who signed a 20-year gaming concession contract on 26 June 2002, with contract valid from 27 June 2002 to 26 June 2022. On 23 December of the same year, after making a significant amendment on the concession contract and with the approval of the government, the Galaxy Casino signed a sub-concession contract with The Venetian Macauand mutually pledge to equally share the MOP$8.8 billion investment in Macau.
According to the contract, the concession is valid from 27 June 2002 to 26 June 2022. The concessionaire is obligated to fulfill the projected investment of 8.8 billion patacas within 10 years, including two resorts and a conference center to be open before the end of 2006.
Any dividend in investment could be designated to the expenditure of projects that would benefit the SAR. The contract has also stipulated the financial liabilities of the concessionaire, which included: an annual payment of 1.6% of the gross gaming casino revenue to a public foundation for the promotion and development of cultural, social, economic, educational, scientific and charity activities; an annual payment 2.4% of the gross casino revenue for urban development and construction, promotion of tourism and social security, on top of the casino tax (35% of the Gross Income) stipulated by relative laws.
In addition, the concessionaire is also liable for a fixed premium of 30 million patacas starting from June 2005 or the inauguration day of their first casino, plus a variable premium according the number of gaming tables and machineries such as slot machines in operation annually.
Secretary for Economy and Finance, Francis Tam who heads the Tender committee said in the press conference that the Government has set different terms in the contracts with Wynn Resorts and Galaxy Casino, taking into consideration that the two new concessionaires could only start the operation of their flag-ship facility in a few years’ time while Macau Gaming Company could start right away with what they have inherited from STDM.
The advantage of being experienced in the local market was also considered, said Mr. Tam, thus lower requirement on contributions to charity and community were given to the two new concessionaires, in the purpose of creating an environment for fair competitions.
Mr. Tam said that the Tender Committee would be reformed into Gaming Policy Consultant Committee, which would establish contacts with international gaming monitoring authorities, in order to perfect the system and meet with the international standards. He also said that the Government would in the future continue in perfecting relative regulations and laws, in respond to the new situation.
The Venetian
Galaxy’s concession agreement with the Macau government includes an independently managed sub-concession held by Las Vegas gaming mogul Sheldon Adelson’s The Venetian. The Venetian’s first 1-million square feet, USD 240 million casino, Sands Macau opened on May 18, 2004 with 277 gaming tables, 405 slot machines, six restaurants, a 750-seat theatre, 51 guest suites, 18 VIP rooms, and a spa.
Las Vegas Sands Inc. will build a hotel-casino resort, called “Venetian Cotai”, which will feature baroque Venice — canals, gondolas, singing gondoliers and other legendary Venetian icons, on the Cotai land reclamation area between Taipa and Colane Islands. The 7.5 million sq. ft. resort will open in 2006, initially with 1,500 rooms, a convention and exhibition center, a 12,000-capacity indoor stadium, and a 250,000 sq. ft. shopping center. World-class architecture firm, Skidmore, Owings and Merrill (SOM) is the master planner
Reference: Macau Government Portal
