Incoming Macau leader faces gaming, transparency challenges
MACAU, June 23 (Reuters) - With the world's top gambling hub of Macau at a crossroads from the financial crisis, expectations have mounted for its incoming leader to steer a more sustainable growth path while building a more transparent government.
Ex-minister Fernando Chui has now emerged as Macau's sole candidate for chief executive, after garnering overwhelming support from a 300-person election committee at the close of a formal nomination period on Tuesday, rendering obsolete a planned election on July 26.
While the liberalisation of Macau's casino sector in 2002 has brought the former Portuguese colony rapid economic growth as Las Vegas giants like the Sands and Wynn Resorts piled in, Macau has also been left vulnerable in the downturn given the overwhelming reliance on such gambling lifeblood.
Visa curbs on Chinese visitors have also badly hurt casino operators, though there's been speculation Beijing might soon scrap such curbs as an election gift to Chui.
"For the gambling industry to reach a natural, healthy level you need to invest greater resources so that the economy is more diversified," Ambrose So, the CEO of SJM Holdings (0880.HK), the casino flagship of gaming tycoon Stanley Ho, told Reuters.
While So said he didn't expect Chui to drastically change any gaming policies, he welcomed more regulations on Macau's junket operators who now dominate the lucrative VIP high-roller market.
"We all hope that the new governing team can further regulate the gaming industry, to improve the system," So added.
Eva Lou, a spokeswoman for Chui, told Reuters it was too early to comment on his possible gaming policies as Macau leader.
Some analysts, however, said Chui could face pressure to cut Macau's hefty gaming taxes of around 39 percent, to boost its casino's margins and improve overall competitiveness against Singapore, whose upcoming mega-casinos will be taxed far less.
"The current casinos are not generating very superior returns," said Aaron Fischer, the Asian head of gaming research for CLSA Asia.
"So at the moment, there's very little incentive for the existing casino operators to invest in Macau."
Yet with the Macau government needing to invest heavily in transport and other public infrastructure in the coming years, David Green, a consultant who advises Macau on gambling policy, said he didn't expect tax cuts anytime soon given the city's great reliance on gaming for around 70 percent of its revenues.
INSIDER
Chui, a former senior government official with a broad policy portfolio spanning culture, sports and public health, comes from one of Macau's most powerful and wealthy families whose commercial interests include construction, finance and health.
While Chui's business and public policy pedigree will help him govern, some in the enclave are uncomfortable with Chui's close links to the corruption-tainted administration of incumbent Macau leader Edmund Ho. Continued...
