Apparently, the diversification plan presented by the concessionaires was rejected by the Macau government. Now, its launch is expected in September, allowing time for both parties to come to an understanding and reconfigure their proposals. An anonymous source speaking to Asia Gaming Brief says that the plans presented by the concessionaires are still far from what the government considers necessary for the region’s future.
They even claim that “major changes” are needed in the proposals, and Macau authorities are questioning the effectiveness of the projects presented.
It was already known that this new phase of public-private cooperation wouldn’t be easy to achieve. The timing doesn’t help either. During a phase of economic and financial recovery, the concessionaires’ priorities are not focused on long-term objectives but on mitigating the losses accumulated during the pandemic, and quickly. They do this through a model well known to these companies – gambling.
The revenues of the major industry have not yet recovered – far from it – which leads to some hesitation on the part of the concessionaires to enter a new era without recovering from the current situation.
Furthermore, this new phase doesn’t guarantee success, let alone equivalent success. Since immediate revenue diversification is not a priority for anyone, it is understandable that there hasn’t been enough time or necessary resources to draft a plan that would appease all parties and interests. For example, the concessionaires have many doubts about how to revitalize the old neighborhoods and capitalize on that.
For now, this setback is not a cause for alarm. In fact, it is a good indication of how seriously the government takes its role. However, the government also needs to consider the role and intentions of the concessionaires in the diversification process. The plan must align with the interests of these companies, which is naturally to generate additional revenue while fulfilling the requirements of the new concessions.
It is not fair or honest to demand excessive social responsibility from large corporations. In other words, the government needs to steer while the concessionaires act as the driving force. It needs to guide the concessionaires without forgetting their nature. The true responsibility for changing Macau lies with the government, and thus, it must lead by example and provide direction.
This setback in the project shows that concessionaires are not 100 per cent sure of their responsibility for diversification, nor how to drive it. The truth is that the transition is visceral and radically changes the business model, so it takes time. As far as the Government is concerned, it is positive about the demand it is exerting on the concessionaires’ projects. The mindset is still being refined. There is much to improve for co-operation to be successful and mutually beneficial, and that responsibility lies with the Government alone. We await the announcement to see how each concessionaire plans its diversification and whether this will be just a burden in their accounts or an asset for their future.
