Inside Asian Gaming

IAG JAPAN SEP 2020 60 process the results of its delayed public consultation, as well as to consider possible regulatory improvements and efficiencies which would provide greater certainty, and less compliance cost to operators. A further and distinctly material advantage is that the government could offer concession terms extending through to December 2049, when the SAR and its Basic Law will effectively expire. Suppose the existing concessions were extended until 2027; that would leave a further 22 years post-award and execution of new concession contracts, a term only two years longer than the existing term of each concession. Should the tender proceed in 2022, the temptation might be to shorten the term, say to 15 years, and leave it to a succeeding administration to make what it could from a final 12-year concession term. Certainty commands a premium – hence a longer final term is COLUMNISTS highly likely to produce a better outcome for the SAR than two shorter terms. Whatever course the government may take, it should prepare itself for pushback should it aggressively pursue a high premium for the grant of new concessions. The pandemic risk is not limited to COVID-19. Bird flu, swine flu, MERS and SARS have all had pandemic potential, and all have impacted Asia within the last 20 years. Operators will have to develop new responses to the long-tail impact of such pathogens on travel, casino floors, convention and meeting spaces, and hotel occupancy rates, in particular. There can be no certainty that any operator will willingly commit billions of US dollars to the construction of new integrated resorts, whether in Macau or anywhere else. An unwillingness to recognize this new dynamic is to portend failure.