MB 74 | June 2010 by Macau Business

WATCHDOG BLUES CRITICS ROUND ON LAND CONCESSION MONITORS

CRITICAL CONDITION Inside Macau’s sick public healthcare system

ISSN 1812-6855

GOLD RUSH

More revenue records smashed OFFICIAL SECRETS

Who decides what you know? EASY DOES IT

City tweaks gaming law WHEELY GOOD

Macau leads moped revolution TWO TRUTHS

Different casino strokes in Singapore

Macau MOP 35 Hong Kong HK$ 40 Mainland China RMB 35

JUNE 2010

42 COVER STORY A case for treatment: As Macau’s casinos rake in record revenues, the city’s healthcare system shows signs of falling apart. We expose the sick underbelly of medical provision in the world’s richest gaming destinantion and ask, who cares?

TRANSPORT

24 The wild card Bombardier’s rail gambit 26 Rail confidence Mitsibushi on track 28 Long train coming Guangzhou-Zhuhai link late 30 Lifeline time Courts hand TCM a break

LABOUR

37 Good news, bad news Pay up in shrinking job market

POLITICS

40 Keeping secrets Who decides?

JUNE 2010

SOCIETY

50 How others see us A Hong Kong view of Macau

PROPERTY

54 Ups and downs Transactions on the slide 56 Closed doors Bite on land concession watchdog 58 Cupboard is bare Loan fund dries up 60 Stalled plans Iao Hon on hold 62 Call on land Govt defends land concessions

JUNE 2010

GAMING

76 Tweaking it Gaming law makeover 79 Macau shows muscle Working through stock turbulence 84 Poker face MB at the table 86 Hard luck casino Rocky start for Singapore 90 Tale of two casinos Resorts World v Marina Bay Sands 92 Indian gambit Gaming in Goa

G2E ASIA SPECIAL

96 This gaming life Len Ainsworth takes top prize 99 Disecting the dragons Assessing Asia’s casinos 100 On a junket Future bright for VIPs

JUNE 2010

101

Strip tease Cotai powers ahead 102 Promised lands Asia’s new players 103 The game changer Tourism and gaming

ARTS and CULTURE 138 Super troupers Hip-hop hits city

THE FROZEN SPY 151 No one is safe

OPINION 10 32 38 51 119

From the publisher’s desk The frog economy Identity Economics Shooting the messenger Best practices Achieving your goals 150 The Chinese road to Pyongyang

JUNE 2010

Six short years ONE DAY, A WHILE BACK, I FOUND MYSELF thinking that Macau deserved more than just the countless media outlets it already had, both in Chinese and Portuguese. A couple of years earlier, my partner and I had transformed our Portuguese-language newspaper from a weekly to a daily. The Portuguese community was well served, with three dailies, a weekly, and radio and TV stations. For a universe of a few thousand people, Macau is indeed a unique place. Two prior attempts to launch English language newspapers had failed, but I’ve always believed that I am quite good at learning from other people’s mistakes. So, little by little, I spread the idea that a business magazine – albeit with a more diversified content - made perfect sense at a time when the government was trying, once again, to give a little push towards internationalising the city. The liberalisation of gaming was already a hot topic, at least in the newspapers, and this, together with the will to integrate the city with the Delta, was surely a big positive when attracting foreign investment. I didn’t expect any support from the government, nor should I have done, because governments do not have to support private initiatives, although a clear picture is yet to emerge in Macau on this matter. I presume it is so, due to the personal interests of some leaders for whom the word “transparency” and the expression “free competition” are synonymous with free judgment. The timing of our launch, the way we created the editorial guidelines and our clear perceptions of the difficulties that lay ahead for a city with such limited resources, ended JUNE 2010

up acting as a seal of guarantee. That and our readers who, whenever they can – and we are glad they do – remind us somewhat sharply about our mistakes and slips. We were proud of our gradual increase in circulation and for our presence in the main hotels, ferries, local airline companies and, more recently, in restaurants and luxury, stylish and renowned car dealerships. Also - and we were really proud of this - to be the first Macau publication ever sold in Hong Kong’s international bookstores is indeed a landmark, especially when one considers that Hong Kong publications, in English and Chinese, have been leaving their mark in Macau for decades. As we enter this seventh year of publication we promise to continue doing what is demanded of us while getting as close to the truth as possible. We also promise to be as impartial as possible, with the conviction that we exist as an amplifying chamber for an all too often mute voice, that of the population. We will strive to be a vehicle for the communication of the ideas, the projects and, sometimes, the lunacies, of a city steeped in the whitehot heat of development. Naturally, we continue to rely on the preferences, the likes and dislikes, the pressures and the gentleness of everyone that takes us with them. We especially count on the team that works on this project as if every day is the first, and on our friends and clients who put up with us and pay our bills. Six years…it’s little wonder that we think this is the first day, since it seems like just yesterday that we embarked on this adventure…!

A worthless system MACAU’S SICK HEALTH CARE SYSTEM MUST BE CHANGED. We have been demanding it for decades but now, more than ever, something must be done. It’s not so much the way consultations are made, the way bookings are taken or the way medical specialties are created. It’s the way people are chosen to work at the Macau public hospital, how specialists of doubtful quality are brought in from the mainland and how the public interest, our well being, is being managed. The current chief executive must be aware of this. Healthcare fell under his responsibility for a decade and it was, perhaps, his Achilles heel. Fernando Chui Sai On would be mistaken if he would believe that the lack of investment in the public hospital in favour of the Kiang Wu hospital or even of the Science and Technology University hospital, is something that can be easily forgotten. Some of our leaders keep making the same mistakes, and the only explanation for them doing so is that they still need better political training. They keep supporting some projects, even if that support is difficult to defend under the principle of a more transparent administration. The risk is, consequently, the public interest being neglected. The Conde de São Januário hospital remains

the setting for some quite incredible cases - which in media parlance are known as ‘’medical blunders’’ but which require much more grave language to describe them. They are caused, by and large, by a mixture of professional ignorance, negligence and carelessness. Such cases should, at least, be handled with a few slaps in the face and summary lay-offs. Nothing is more important than our health. What good is it if Macau tries to pass itself off as an international city, only to have a health care system which is basic – at least in the hospital - since the feedback we get from private health care centres is much better? Perhaps the fact that care in the centres is less demanding than in the hospital explains something. What kind of new hospital – in Taipa - will be built when many nurses do not have officially recognised qualifications? When was the system infected by the stupid xenophobia that contaminates the general law of hiring labour and prevents the promotion of non-local workers? All this at a time when the weakness of local professionals is evident due to either a basic lack of staff or the absence of certain medical specialties? How long will this healthcare chaos last?

It’s never too much I DON’T WANT TO REPEAT MYSELF, BUT SOME THINGS are just too silly to be left alone. The execution of the budget remains at a ridiculous level. What is this government, awash with cash, waiting for? At the very least, can’t it get on and do what it told the Legislative Assembly it would do? Of course we understand the lack of ideas. This administration isn’t exactly bursting at the seams with geniuses, but surely it’s not hard to identify what Macau lacks and to make sure it gets it. And, my dears, I’m not talking about a special program. In May, more casino revenue records were set, following the records set in January and April 2010, all this at a time when the entire world was hurting. In the first quarter, our GDP growth reached 30

percent, year-on-year, and what does the government do? That’s right, nothing. No ideas, no projects, nothing. Is it because the question of the need for public investment is too complex and transcendental at a time when the city needs to create open spaces and infrastructure, to get ready for more growth spurts and to attract investment? Or do our leaders think that the success of a government is measured by the quantity of money it has stashed in the public coffers? And, as if that wasn’t enough, three billion patacas (US$400 million) is spent every year in cash donations to all residents, rich and poor, tall and short, fat or skinny, in what has almost become a public bribe. Brilliant! JUNE 2010

VOL.1 Nº74

Editorial Council Paulo A. Azevedo, Albano Martins, Duncan Davidson, Edmond Ieong Man Cheong, Herman He

Founder and Publisher Paulo A. Azevedo pazevedo@macaubusiness.com

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Multimedia Editor Paula Campos pcampos@macaubusiness.com

Property Editor Alan Tso Senior Analyst José I. Duarte Hong Kong Bureau Jack Regan (Chief), Anil Stephen Europe Bureau Joyce Pina (Chief), Paula Joyce Letters to the editor editor@macaubusiness.com

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JUNE 2010

Special Correspondent Muhammad Cohen Features Editor Anita Duffin Assistant to the Publisher Weng Fung weng.fung@macaubusiness.com

Contributing Editors Carlos Picassinos, Catarina Morgado, Christina Yang Ting Yan, Derek Proctor (Bangkok), Emanuel Graça, Island Ian, João Francisco Pinto, José Carlos Matias, Lois Iwase, Luciana Leitão, Maria João Belchior (Beijing), Marta Curto, Max V. de Leon (Manila), Ray Chan, Sofia Jesus, Steven Chan, Wu Yu Regular Contributors Branko Milanovic, David Cheung, Dominique Moisi, Eswar Prasad, Frank J. Fahrenkopf Jr., Hideaki Kaneda, José António Ocampo, José Sales Marques, Joseph Stiglitz, Leanda Lee, Keith Morrison, Kenneth Rogoff, Kenneth Tsang, Marvin Goodfriend, Pan Yue, Paulo J. Zak, Peter Singer, Richard Whitfield, Rodrigo de Rato, Robert J. Shiller, Sin-ming Shaw, Sudhir Kalé, Sun Shuyun, Vishakha N. Desai, Wenran Jiang Advertising Bina Gupta binagupta@macaubusiness.com

Fátima Cameira

Art Director Connie Chong

fcameira@macaubusiness.com

Graphic Designer Michael Shaw

José Reis

Isabel Abreu

isabel.abreu@macaubusiness.com jreis@macaubusiness.com

Photography António Falcão, António Mil Homens, Carmo Correia, John Si, Nuno Calçada Bastos, MSP Agency, Agencies

Xu Yu, Irene

Illustration G. Fox, Rui Rasquinho

Agencies AFP, Lusa

irene@bizintellingenceonline.com

Translations Stephanie Chu, PROMPT Editorial Services

Exclusives Gambling Compliance, Hoje Macau, Project Syndicate Printed in Macau by Welfare Ltd Published every month in Macau. All Rights Reserved. Macau Business magazine is a media product of De Ficção - Multimedia Projects

JUNE 2010

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JUNE 2010

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NEWSSTANDS AND SUPERMARKETS (Macau Peninsula) 43 Av. Infante D. Henrique 643 Av. da Praia Grande 3 Av. Dr. Mário Soares 221 Alm. Ribeiro 271 Alm. Ribeiro 317 Alm. Ribeiro 327 Alm. Ribeiro 7b Lrg. do Senado 17 Lrg. do Senado 31 Lrg. do Senado 13 Rua de S. Domingos Rua de Horta e Costa 27A Cheng Chong Kie Rua de Coelho de Amaral Av. do Dr. Rodrgo Rodrigues 30C Rua de Entre Campos 54 Rua da Barca Iong Vai Bldg. 5 Estrada de Adolfo Loureiro 73 Rua de Almirante Costa Cabral Av. do Ouvidor Arriaga Rua do Francisco Xavier Pereira Rua do Almirante Costa Cabral Av. do Sidónio Pais

Alm. Dr. Carlos d’Assumpção Mei Kui Koung Cheong (Phase I) Vai Choi Garden Block C KIOSK - Mandarin Oriental Hotel NEWSSTANDS AND SUPERMARKETS (Taipa) Rua de Bragança (Mei Keng Garden Blk. 1 Taipa) Est. Gov. Albano de Oliveira (Mercearia Fruta Man Yip Taipa) Av. Dr. Sun Yat Sen (Mercearia Fruta Man Yip Taipa) Rua de Seng Tou (Supermercado Pou Ip Taipa) Av. Dr. Sun Yat Sen (Seng Cheong Supermarket Taipa) Hyper Gourmet - Ocean Garden BOOKSHOPS Portuguese Bookshop - Largo do Senado BOOKACHINO- NAPE, Macau TIMES Bookshop - Shop 2526, 2200 (The Grand Canal Shoppes Venetian Macao) Culture Plaza Bookshop - Rua do Campo

Find us in Hong Kong BOOKSHOPS Aberdeen Marina Holdings Ltd. Ah Lo Magazine Co. Bookazine Ltd - Canton House Bookazine Ltd - Far East Finance Bookazine Ltd - Jardine House Bookazine Ltd - Prince’s Building Bookazine Ltd - Shui On Bookazine Ltd - Tsim Sha Tsui Chaip Coin Co Ltd Cham Kee Cosmos Book Co Cosmos Nathan Road The Commercial Press - Jordan The Commercial Press - King Road The Commercial Press - Sha Tin The Commerical The Commercial Press - Yee Woo Nobletime Ltd (c) DFS - Int’t FC (c) DFS - Prince’s Building Exchange Mall Great Food Hall

Hong Kong Book Centre - City Plaza Hong Kong Book Centre - On Lok Yuen Hits Media Centre Jumbo Grade - City Plaza II Jumbo Grade - Grand Century Jumbo Grade - Int’l Finance Ctr Jumbo Grade - Pacific Place II Jumbo Magazine House Kelly & Welsh Ltd Kelly & Walsh - Exchange Square Kwong’s Mandarin Hotel Mannings New Mall - Discovery Bay Page One - Time Square Page One - Central Page One - Kowloon Tong Page One - TST Park’n Shop Swindon - 370 Ocean Centre Swindon - Lock Road Tung Son Magazines Co Variety Worldpac Ltd Y.M.C.A. of Hong Kong Dymocks

Restaurants

JUNE 2010

Viva Macau got MOP7 million fill up he government put MOP7 million in a fund for Viva Macau - a cash boost on top of the widely-known MOP200 million loan, the director of Macau Government Tourist Office (MGTO), Costa Antunes, revealed last month. The tourist office also signed a three-year advertising contract worth MOP28 million with the grounded low cost airline, for a new livery so that Viva Macau could promote Macau overseas. The MOP7 million fund from the government was part of a plan to help Macau-based airlines. From the government official’s explanation, Viva Macau will only be asked to repay the MOP200 loan. Meanwhile, Viva Macau passengers who have filed complaints with the Consumer Council (CC) have started receiving an email regarding a creditors’ general meeting convened by the company. The council announced last month it has received a letter from Viva Macau’s lawyers announcing the meeting. Viva Macau was grounded at the end of March and as of May 18, the CC had received a total of 1,917 complaints and inquiries, involving an amount of MOP6.1 million. A total of 714 cases involve local residents.

Airport ‘holding back’ MICE The lack of adequate infrastructure, particularly an airport with extensive international connections, is the main reason Macau’s meetings business has not grown as fast as expected. So says Michael Leven, president and chief operating officer of Las Vegas Sands. The city started pursuing business travelers seriously with the 2007 opening of the Venetian Macao, “but we didn’t have enough hotel rooms to get the big functions. “Even if we have 3,000 rooms at the Venetian, we needed more, which is what we’re building now,” Leven told The New York Times. “Macau will be a big competitor for Hong Kong,” Leven said. “Five years from now, it will be on an even footing if everybody does what they’re supposed to do — government and private enterprises.”

Business aviation show in Macau Business aircraft manufacturers Gulfstream, Dassault, Hawker Beechcraft and Cessna will exhibit at the new Asian Business Aviation (ABA) show in the Macau Business Aviation Centre (MBAC) from June 9 to 11. Other confirmed exhibitors include service companies such

as Tag Aviation and Sino Private Aviation. ABA will open with a one-day conference on June 9, with an agenda intended to provide guidance to end users about various options and considerations. The exhibits will be on show on June 10 and 11. ABA has the backing of the Asian Business Aviation Association (AsBAA).

Millenium bcp gets onshore license Portuguese bank Millenium bcp has been granted a license to operate as a retail bank in Macau. Millenium bcp was already operating in Macau throughout a local offshore subsidiary. The request for an onshore license reveals Millenium bcp’s confidence in the local economy, the manager of the subsidiary João Pãosinho Pãosinho said recently. The bank plans to focus on the corporate market, providing loans to companies, institutions or individuals that plan to do business in African countries such as Angola and Mozambique. Millenium bcp is the biggest private Portuguese bank, with 4.3 million customers and 900 branches around the world.

JUNE 2010

Wing Lung Bank comes to Macau The Hong Kong based Wing Lung Bank has been granted a license to operate as a retail bank in Macau. The authorisation was published on the Official Gazette. Wing Lunk Bank was established in 1933 and has 39 banking offices and a total staff of about 1,600 in Hong Kong.

JUNE 2010

GDP up 30 percent

Safe and sound Security officials say we are living in a safer city as crime figures drop

acau’s crime rate dropped 14 percent in the first quarter of this year, security chiefs have revealed. The Secretary for Security said there were 2,839 offences between January and March 2010, characterising the situation as stable. Cheong Kuoc Va said violent crime has decreased by 16 percent, with only one recorded case of murder between January and March this year. The most common crimes were against public property and individuals. There were 1,595 crimes against property and 535 against people, a decrease of 12 percent on the first quarter in 2009. Only crimes of extortion and usury rose by one and two cases respectively, while criminal intimidation fell by 45 percent.

Labour crimes down There was an 18 percent decrease in crimes of enticement, aid, shelter and employment of illegal immigrants; a 31 percent drop in cases of drug use; but an 18.5 percent increase in cases of the trafficking and sale of narcotics. Authorities also detected 8,490 people illegally staying in the territory, of which more than 7,000 came from the mainland. The figures represent a decrease on the same period in 2009. There were 21 cases of juvenile delinquency, 30 percent less than 2009, involving 41 minors. In the first three months of the year 963 people were arrested for alleged criminal offences and sent to the Public Prosecutor’s Office.

Drugs and alcohol Cheong said: “Despite the security situation in Macau being stable, the police will continue its preventive and repressive measures, particularly in combating drug trafficking and driving while intoxicated, both of which recorded increases. “We will also closely follow the development of new criminal trends by taking effective measures to ensure social tranquillity,” he added. JUNE 2010

Macau’s Gross Domestic Product (GDP) expanded by 30.1 percent in the first quarter of 2010, a year-on-year rise in real terms from 27.4 percent growth in the fourth quarter of 2009. The gaming and tourism sector experienced vibrant growth in the first quarter, with gross gaming revenue (excluding gratuities) soaring by 57.1 percent year-on-year in nominal terms, and total visitor spending (excluding gaming expenses) rising further from a 0.8 percent increase in the fourth quarter of 2009 to 14.3 percent. The decline in merchandise exports tapered off from 41.8 percent in the previous quarter to 12.8 percent; however, gross fixed capital formation shrank continuously to post a decrease of 38.9 percent. In terms of major GDP components, private consumption expenditure rose by 2.3 percent in the first quarter of 2010, moderating from the 4.8 percent increase in the previous quarter. As a gauge of investment, gross fixed capital formation contracted by 38.9 percent, slackening further from the 34.9 percent decrease in the fourth quarter of 2009. Total private investment shrank by 39.2 percent while total government investment went down by 15.8 percent.

Loans rules to change The Monetary Authority of Macau (AMCM) is preparing to roll out new supervisory guidelines to set lower loan-to-value ratios and other more prudent requirements for property mortgage related credits granted by local banks. This will help banks in the upkeep of continued stability in the face of market competition, AMCM stresses. In February 2008, AMCM rolled out a consultation paper relating to guidelines on risk management of property mortgage business. Based on the bedrock of the same paper, AMCM is currently conducting consultations with banking practitioners regarding supervisory requirements, it said.

European SMEs eye Macau Commercial exchanges between the European Union members and Macau grew around 10 percent over the last five years, according to the head of the European Union (EU) Office in Hong Kong and Macau, Maria Castillo Fernandez. “More and more small and medium companies are coming to trade fairs in Macau and in China or asking for information from the European Union Office,” Fernandez told the Macau Daily Times. With European countries facing tough times , Fernandez notes that they need to take advantage of the weaker euro. The European countries “must find other markets” and China is a priority, Fernandez stressed, noting that the country has already recovered from the international financial crisis.

JUNE 2010

Franchise Expo

Green thinking call Officials have drawn up a document which aims to raise awareness of the potential environmental impact of major public works potentially groundbreaking document - “Guidelines for Drafting Environmental Impact Assessment Reports” - has been drawn up by the government. It was presented following the recent approval by the Executive Council of a plan for a 361.65 acre landfill in the East and North areas of Macau – about 12 percent of the peninsula’s total area. Legislator Chan Meng Kam took the opportunity to warn the government to make sure it takes environmental impact into account when approving development works. He also suggested that before proceeding with the work there should be dialogue and scientific studies. Over the past decade, Macau’s area

has increased by 20 percent, due to landfills, but not without the territory paying an expensive price including the degradation of the ecological environment and its resources from the shoreline, and the loss of native animal and bird species, among others. The lawmaker also said the city’s environmental protection laws have not changed since 1991. In reply, an Environmental Protection Bureau spokesman said that “the matter shall be subjected to public consultation” while also mentioning that the government “would review the control standard on illumination pollution” as well as increase the control and direct supervision of “greenhouse gas emissions by motor vehicles on public roads”.

MasterCard teams up with taobao.com MasterCard Worldwide inked a strategic alliance with Alipay. com Co, Alibaba Group’s online payment platform. With the availability of a new authentication service launched by MasterCard, cardholders in Hong Kong, Macau and Taiwan can make purchases at the website of taobao.com by entering an additional password. Online shoppers from the three regions can also use MasterCard to pay for goods purchased 460,000 other merchants using Alipay as their preferred payment platform. The move will meet Chinese consumers’ increasing desire to shop globally and the demand of customers outside China for Chinese goods, Alipay chief executive Lucy Peng said. Taobao.com boasts an annual transaction turnover of more than 100 billion yuan.

JUNE 2010

Following the first Macau Franchise Expo (MFE) in 2009, the Macau Trade and Investment Promotion Institute (IPIM) will continue to organise the event this year. 2010MFE will be held at the Macau Tower Convention and Entertainment Centre from 8 to 10 July 2010, and will be coordinated by the Association of Advertising Agents of Macau. 2010 MFE will bring together around 100 enterprises (up 40 percent) in franchising, chain operations and brand agencies from the mainland, Brazil, Japan, Taiwan, USA, Hong Kong, Malaysia, Singapore and Portugal, involving food and beverage, retail, business services, fashion, entertainment, education, business strategic planning and consulting services sectors.

IPIM and eBay in link up Online auction and shopping website eBay Hong Kong has joined the Macau Trade and Investment Promotion Institute’s (IPIM) E-Commerce Support Program. IPIM’s E-Commerce Support Program’s main goal is to help small and medium enterprises (SMEs) adopt e-commerce. IPIM had already signed a similar deal with Alibaba.com, the main online auction and shopping website in the mainland. The E-Commerce Support Program, launched in November 2009, provides local SMEs with a maximum MOP20,000 subsidy per-year to develop online trading businesses with any of the partner e-commerce operators. Up to middle-April, 56 applications have been received by IPIM – 54 have been approved while the other two are still being analysed.

JUNE 2010

Forecast brighter for Macau economy Forex going up, again

Photo: Luís Almoster | MSPagency.org

The Monetary Authority of Macau says the preliminary estimate of Macau’s foreign exchange reserves amounted to MOP157.3 billion (USD19.66 billion) at the end of April 2010. The reserves rose by 0.7 percent from MOP156.2 billion (USD19.53 billion) for the previous month. Compared with a year earlier, the reserves increased by MOP19.9 billion or 14.5 percent. Macau’s foreign exchange reserves at end-April 2010 represented 31 times the currency in circulation.

Due to remarkable growth in the fourth quarter of 2009, the overall Macau economy is expected to revive more notably in 2010, according to the most recent forecast from the Department of Economics at University of Macau. With a more positive outlook for the world economy forecast, Macau’s GDP is expected to grow by 14.4 percent, ranging from a pessimistic 8.3 percent to an optimistic 20.5 percent in 2010, according to the Macroeconometric Structural Model of Macau.

Security of information under fire Information security in Macau is poor, primarily because the companies and public services are unaware of the risks involved. The warning came from Thomas Chan, the head of the Telecommunication System and Service Division in the Public Administration and Civil Service Bureau as he presented the first Macau Information Security Survey, the Macau Daily Times reported. The survey revealed that only 6 percent of IT professionals from the government and private sector have implemented information security policies. However, virus or other software infections have affected 88 percent of them in the last year. The survey also shows that people’s confidence in the effectiveness of security strategies is much higher than the reality. Chan stressed the need for “more training” on the issue.

JUNE 2010

Deposits up Total deposits in the banking sector in Macau grew 2.2 percent in March from the previous month to MOP299.7 billion. Resident deposits rose 2.9 percent in March from the previous month to MOP210.8 billion. Concurrently, nonresident deposits stayed flat at MOP73.0 billion and public sector deposits with the banking sector rose 3.3 percent to MOP16.0 billion. Domestic loans to the private sector grew slightly by 0.4 percent in March to MOP105.1 billion. Loans to transport, warehouse and communications and personal housing loans increased quarterto-quarter at respective rates of 32.5 percent and 9.8 percent.

Google Street View under official eye The Macau government has sent a letter to Google asking about the personal data “mistakenly” collected by the company when it carried out its Street View project photographing the city. Google has revealed on its official blog that the company has been “mistakenly collecting samples of payload data from open (i.e. non-passwordprotected) WiFi networks,” while carring out the Street View datacollecting process. Macau’s Office for Personal Data Protection said it was highly concerned about Google’s practice. Meanwhile, Hong Kong’s privacy commissioner for personal data meet last month with a Google representative to debate this issue - the company agreed to delete the personal data collected when carrying out the Street View project in Hong Kong.

Retail sales soar The value of retail sales in Macau for the first quarter of 2010 surged by 36 percent from a year earlier. The value of retail sales for the first quarter of 2010 was MOP6.85 billion, of which retail sales of watches, clocks and jewellery took the largest share of 23 percent. Compared with the revised MOP6.53 billion in the fourth quarter of 2009, the value of retail sales rose by 5 percent, with notable increases in the retail sales of leather goods – an increase of 20 percent – and household electrical appliances – more than 19 percent. In the first quarter of 2010, about 42 percent of the retailers reported decreases in the sales volume from the fourth quarter of 2009. In terms of retail prices, about 57 percent reported that the prices were stable, 21 percent stated that the prices increased whereas 22 percent reported the prices decreased. Regarding the business outlook for the second quarter of 2010, about 61 percent expect sales volume will increase or remain stable compared with the first quarter. About 87 percent expect the retail prices will remain stable or increase.

Congratulations on the 6th Anniversary of Macau Business

Industrial production edges up The Industrial Production Index (IPI) of Macau rebounded by 2.4 percent over the previous quarter in the first three months of 2010. The rise comes on the back of a 13.6 percent quarter-to-quarter increase in the production index of electricity due to increased electricity generation. On the other hand, production indices of manufactured textiles and apparel dropped by 3.9 percent and 3.2 percent respectively. Compared with the first quarter of 2009, the IPI for this quarter fell by 48.0 percent. The production index of the manufacturing sector dropped by 40.5 percent, upon 42.7 percent and 56.8 percent decreases of the indices of manufactured textiles and apparel, respectively.

Inflation fears Low competitive desire An official Survey on the Quality of Life of Macau Residents has revealed that respondents lacked the “desire” to enhance their own competitiveness in the local labour market. They also have insufficient confidence to meet the future social demands in terms of professional skills, Xinhua reported. The survey was carried out by the governmentrun Research Center for Sustainable Development Strategies last year, which interviewed 3,500 local households.

The Macau government is “highly concerned” about the rising rate of inflation, Chief Executive Fernando Chui Sai On said last month. Chui gave an assurance that steps will be taken to tackle it. According to official data, the inflation in Macau hit 2.56 percent in April this year, with the price of food and transport registering major increases. Once the inflation rate reaches 3 percent, the government will adopt a series of measures to tackle rising prices in a bid to ensure the quality of life, especially that of disadvantaged groups, Chui added.

JUNE 2010

Transport North America. Later, Bombardier wants future orders in Asia to also be manufactured in Zhuhai, he explains. The city not only provides proximity to key markets, but also has port access, making it a good base, Roh notes. He says Bombardier has already found a partner in Zhuhai – a bus manufacturing company – and has also successfully presented the project to the local authorities. According to a Bombardier source, a senior official from the neighbouring city recently visited the company’s headquarters, in Montreal (Canada).

What’s in it for Zhuhai?

Playing the wild card

Bombardier’s promise to create an automatedpeople-mover factory in Zhuhai if it wins the tender for Macau’s light railway rolling stock, may give the company an edge over the competition BY EMANUEL GRAÇA

s the Office for Transport Infrastructure (GIT) analyses the tender proposals for rolling stock and systems for the first phase of the Macau light railway, the three international consortiums competing for the contract have been engaged in heavy lobbying to get the project.

JUNE 2010

The joint-venture between Bombardier and China Road and Bridge Corporation (Macau) has played a wild card. Bombardier has announced that, if they win, the company will install an automated people mover (APM) assembly factory in Zhuhai. This means the vehicles used by the Macau light rail-

way system would be built just across the border.

Historic goal Bombardier’s director for Project Development and Sales for Asia-Pacific, Timothy Roh, says the goal is - for the first time in the company’s history - to assemble such vehicles outside of

The factory project may give Bombardier an edge over the tender competition, but the company also says the investment will be good for University of Macau, as it will provide internship opportunities for students and the chance to develop joint-research. And that’s not all: Bombardier says other companies in Zhuhai and Guangdong province will benefit from the company’s needs, from airconditioners to glass, radio systems and LCD displays, among others. As yet, the company hasn’t provided figures on the investment or the size of the factory. It all comes down to the result of the Macau bid. Roh says if the company loses it, it will scrap the factory plans.

Local flavour As well as being assembled just next door, Bombardier says it will add a local flavour to its vehicles. The livery will be designed by a local artist, and will be based on local landmarks, like A-Ma Temple and Macau Tower. Canadian authorities and

A bridge too far O

pen to the public just five years ago, the Sai Van Bridge’s lower deck was designed to accommodate a future light rail system. However, several studies indicate that structural improvements will be needed for that to happen. According to a technical study by Consulasia for Bombardier and China Road and Bridge Corporation, following the PRC’s engineering guidelines and standards – no local regulations are applicable to cable stayed bridges – all of the stay cables of the bridge will have to be replaced in order to ensure its structural safety.

Cable replacement

Previously, an Ove Arup & Partners Hong Kong Ltd study commissioned by the Office for Transport Infrastructure (GIT) addressed the need for structural improvements, namely the verification and potential replacement of stay cables. In February, GIT’s coordinator, Lei Chan Tong, said that several companies involved in the light railway project had already raised doubts regarding the bridge’s ability to accommodate the light railway. He admitted that significant work would be needed. Lei, however, denied the existence of structural problems in the bridge’s lower deck. Tender extension The technical issues faced by the bidders regarding the Sai Van Bridge was one reason why the deadline for the tender submissions was extended for one extra month, until April 2 this year.

other lobby groups have also been endorsing Bombardier’s bid. Last month, the Canadian Chamber of Commerce in Macau organised a luncheon where the main dish was a presentation of the company’s proposal for the light railway system to several industry partners. For now, the joint-venture between Bombardier and China Road and Bridge Corporation (Macau) already has the price lead in the bid for the basic proposal regarding the systems and rolling stock: MOP4.57 billion. This is 30 percent more expensive than the government’s latest estimations, updated in October 2009. The Siemens and China Civil Engineering Construction Corporation consortium has the most expensive proposal at MOP6.28 billion. Mitsubishi Heavy Industries weighed in with a MOP4.7 billion bid. The Japanese bid offers the lowest price for the

The tender for the supply of rolling stock and systems for the light railway includes the design and construction works needed for it to pass through the Sai Van Bridge. The bridge was one of a number of public infrastructure projects caught up in the corruption scandal involving disgraced former secretary for Transportation and Public Works, Ao Man Long. According to the Court of Final Appeals, Chon Tit (Macau)’s general manager, Chan Tong Sang, paid Ao MOP14 million in exchange for the construction and maintenance contracts of the Sai Van Bridge. During the construction of the bridge there were six serious site accidents claiming the lives of four workers. Chon Tit (Macau) is a subsidiary of China Civil Engineering Construction Corporation, which is bidding for the systems and rolling stock contract for the first phase of the Macau light railway in a consortium with Siemens. E.G.

optional works included in the bid: the system’s maintenance from 2014 to 2024 and two additional train batches, in order to fulfil the 2020 light railway capacity goals 14,000 passengers per hour in each direction.

No start date The light railway system is officially expected to cost MOP7.5 billion – a budget overrun is likely – and in the first stage will be 21 kilometres long and have 21 stations. In 2014, when it is scheduled to go into operation, it will be able to transport a maximum of 8,000 passengers per hour in each direction between Macau and Taipa. To date, there is still no start date for construction of the system. Only after the bidding for supply of rolling stock and systems is complete will GIT lay down a schedule. The project has suffered major delays – it was originally expected to start in 2008. JUNE 2010

Transport

Rail confidence

Mitsubishi Transportation Systems is confident that their proposal for Macau’s Light Rapid Transit tender offers the best life cycle cost benefits. Claiming to be familiar with local working practices, company boss Takayuki Hishinuma believes the government will opt for the Japanese company BY TIAGO AZEVEDO

rapidly growing Macau,” says the firm’s Transportation Systems general manager, Takayuki Hishinuma. Even running against the Siemens – CCECC Consortium and the BT CRBC LRT Consortium (a consortium made by Bombardier and China Road and Bridge Corporation), doesn’t phase them.

“Appropriate price”

Takayuki Hishinuma

t is a long-lasting relationship which started in 1989 when Mitsubishi Heavy Industries was awarded the contract to build the Refuse Incineration Plant in Taipa. The first plant was completed in 1992, and an expansion completed in 2008. From that first approach to the recent proposal for the supply of rolling stock and systems for Macau’s Phase 1 of the Light Rapid Tran-

JUNE 2010

sit (LRT) system was just a small step, setting the company’s sights firmly on the fast growing Macau market. “Throughout our experience, we have worked well with the Macau authorities and business sector, gaining familiarity with local working practices. “Therefore we would like to continuously contribute to Macau society and expand our business in this

According to the specifications of the tender set out by the Macau Government, the evaluation of the total price is done based on three different areas: base offer; 5 + 5 year’s maintenance; and additional trains. “We understand that the life cycle cost of the system including maintenance and additional trains is the most important factor for Macau,” Hishinuma tells Macau Business. “In this respect, our proposed price for 5 + 5 years maintenance and additional trains is the lowest and our total price for the three parts is the lowest amongst the three tenders,” he says. “We are confident that our proposal offers the best benefit for Macau in view of life cycle cost,” he adds. Offering the second lowest in the basic proposed lump-sum category, with a price of MOP4.68 billion – a price difference of 2.5 percent, says Hishinuma – Mitsubishi proposed MOP792 million for the 10-years maintenance, less than half of the second lowest proposal.

They also proposed MOP1.5 billion for additional trains, more than MOP200 million lower than the nearest competitor. Many ask how it is possible for the Japanese company to propose such prices. “Our pricing was a result of optimising initial investment costs and future costs, taking into serious consideration the long term-benefit of Macau,” he says. Moreover, he adds, pricing for maintenance services was studied and offered based on past experiences that the company has rendered worldwide. In addition, Mitsubishi wants to maximise the utilisation of Macau companies and staff regarding such services. “These experiences enable us to achieve efficient operations in maintenance services,” says Hishinuma, stating that it is against corporate policy to charge high service costs to the client in the future after getting a contract with low initial costs. “Our price proposal is not too low, just appropriate to meet all necessary services for the maintenance requirements of the Macau Government,” he adds.

Railway and bridges Apart from apparently pitching the lowest life cycle cost, Hishinuma is quick to point out the other main selling points. “We plan to execute the maintenance services by maximum technology and skill transfer to Macau

27 companies and staff,” he explains. Hishinuma says no stone was left unturned: “The train is the most visible part of LRT systems for passengers. We believe our proposed train exterior will be a symbol of this international tourist city.” But the card up Hishinuma’s sleeve is the bridge: “The Sai Van Bridge modification work is a unique part of the Macau LRT. We have our own engineering and construction division for bridges. “Of the three tenderers, we are the only company who has both technology for railway systems and bridges,” he says. Combining these, Takayuki Hishinuma has no problem saying that Mitsubishi can provide the best solution for the Sai Van Bridge. “While we respect our competitors, we are confident that our proposal is the best and most suitable for the needs of Macau. We strongly believe that the Macau Government will select us.”

In-house tests Regarding the tender specifications, Mitsubishi Transportation Systems general manager confesses to being a fan of the rubber tire solution. “It has the advantage of producing lower noise which is suitable for urban transport,”

Thinking green L

ike any other project nowadays, environmental protection is the key, especially for public transport. If they win the public tender for Phase 1 of the Macau LRT, Mitsubishi Heavy Industries wants to use environmentally friendly materials and energy-efficient technology. “Our train body structure is based on proven past experience and made of aluminium alloy, which is the lightest material for the train body structure specified in the Macau LRT technical requirements,” Takayuki Hishinuma explains. Besides lowering power consumption, the aluminium alloy h as also a higher recycling ratio, maximizing the reuse of materials. “In addition to the train, we will provide the Regenerated Energy Storage System to avoid any waste and reuse the energy,” he adds.

Hishinuma says. “The Macau LRT runs through many tourist places and there are 21 stations in 20km. A rubber tire train LRT is suitable for repeated stop and go over short distances, and also has advantages in cornering on tight curves.

“Every project has its own specific difficulties and challenges, but we are confident that we can overcome any obstacle by using our past experiences,” he says. The 47 months required to finish Phase 1 are achievable, says the manager: “We have

the test track for driverless operation of the rubber tire train at our factory in Japan. We can run sufficient tests before delivering to Macau, ensuring the quality of the train and system, and reducing the testing period at the site,” Hishinuma explains.

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Transport

Long train coming The long-awaited Guangzhou-Zhuhai light railway is behind schedule and will not be completed until 2012 at the earliest, but its impact will nevertheless be far-reaching BY HERMAN HE

he Guangzhou-Zhuhai light railway project is less than 60 percent complete and will miss its targeted opening date of before the Asian Games in Guangzhou this November. The new target date is vague, with the most definite predictions seeing it finished in two years time. Most of the light rail stations are in Zhongshan, and construction on the northern section is moving slightly faster with this stretch ex-

JUNE 2010

pected to open before the Asian Games. The southern section is moving slower and it is unclear if it will meet the same opening date as the northern part. According to a report in a Guangdong newspaper, the last beam of construction has been set up in the northern railway section in Zhongshan, and the construction will progress into the renovation phrase. Li Lianghong, who is in charge of construction at

Namlong station in the southern section said their goal is to complete construction of the station in Zhongshan by August 31.

A bit of a rush However, there is still a lot to do such as post-renovation work, equipment setup and testing, telecommunications, water and a series of support works. It might be a bit rushed to open before the Asian Games. Site workers told the

newspaper that progress at the Guangzhou, Shunde, and Jiangmen sections has been faster, and therefore the Guangzhou-Zhongshan section is expected to open before the Games. The Zhuhai station is the final terminal of the Guangzhou-Zhuhai system, and is on Changsheng Road in Gongbei, Zhuhai. According to the plan, in addition to the ground platform at the Zhuhai light rail station, there will also be two large

A rail big job A

s the main axis of the Pearl River Delta Rail Network, construction of the 143-kilometre Guangzhou-Zhuhai intercity railway began on December 18, 2005. The main Guangzhou-Zhuhai line is 117 km long and the Xiaolan-Xinghui branch line about 26 km. The north section of the main line starts in Guangzhou city extending to Xiaolan across the Xijiang River and passing Guzhen, Jiangmen, and Xinhui in Zhongshan. After completion of the Guangzhou-Zhuhai intercity railway, people in Xinghui will be able to arrive in Zhongshan in 10 minutes. It will take about 30 minutes to Zhuhai and Guangzhou, and an hour to Shenzhen. On completion Xinhui and Jiangmen will be integrated into â&#x20AC;&#x153;the Pearl River Delta one hour city circle.â&#x20AC;? Trains will run from 6am to midnight and there will be an estimated 39.5 million passengers daily in the shortterm, and 55.7 million passengers in the long-term. The system starts from a new railway station in Panyu, through cities including Panyu, Shunde, Zhongshan, Zhuhai and other industrial towns in neighbouring urban areas. Economic scholars believe its completion will allow integration of resources across the Pearl River Delta region and will enhance the cooperation between cities. It will also improve economic development, accomplish cost reductions, and promote the industrial upgrading and transformation of the region.

underground transfer centres to facilitate drop-offs and the parking needs of taxis and other vehicles.

Seamless transfers With a building area of 3.5 million square metres on each floor, this two-tier underground transfer centre will also contain the Guangzhou-Zhuhai intercity rail station vertical transfer area, and aims to meet the goal of seamless rail transport. To facilitate vehicle access, six entrances at the south, north and west in the basement of the station were developed to allow overseas visitors and residents in Zhuhai and Macau to conveniently transfer between transport modes. However, the property rights of the Zhuhai station complex belong to a total

of more than 20 entities, including central government institutions and the police department, making coordination more difficult. In addition, there are a series of underground pipeline systems in Gongbei which link to those in Macau, making construction more difficult. According to the latest figures released by the Zhuhai Municipal Development and Reform Bureau, the constriction at the Zhuhai station of the Guangzhou-Zhuhai light rail was 58 percent complete as of March.

the original construction period of the Zhuhai station was supposed to be two years. But demolition and reconstruction of the underground pipelines has been very difficult and is holding things up. Issues such as compensation and tenant relocation also take time. The project also involves

the land at the entry and exit channels for Macau and Zhuhai which cannot be tampered with at this time. According to the twoyear development plan, the Zhuhai station still needs two more years to complete and open, that is to say, it will be completed by 2012 at the earliest.

Piles and pipelines The design of preliminary construction is being assessed by the Ministry of Railways, while the bridge pile foundation works have H.H. started. According to a source, JUNE 2010

Transport

Photo: Luís Almoster | MSPagency.org

Lifeline time

TCM – and its workers - have been handed a tender lifeline by the courts BY VANESSA AMARO

he TCM four-minute delay controversy has taken a new turn after the Court of Final Appeal suspended the effectiveness of the act, which excluded the bus company from the November public tender. This means that there is still hope for the company to continue to operate its services in Macau. The court took into account the future of approximately 380 workers who would lose their jobs with the likely closure of the company that operates exclusively in the bus sector.

pany on October 14, because the next day only Reolian and Transmac would be permitted to transport the population. As a result, 380 workers would be automatically without employment and compensation would exceed MOP22 million. The company has in excess of MOP14 million in existing bank loans. “The closure and liquidation of the company, along with the dismissal of about 380 employees, constitutes damages difficult to repair,” the ruling outlines in one of its reasons for the decision.

Still unclear

Minute men

What position the lower Court of Appeals will adopt on a pending appeal is still unclear. Only then will the company know whether to celebrate. The May 14 court ruling states that the exclusion of TCM from the new concessionaires’ public tender implies the closing down of business for the com-

The Passenger Collective Public Service Transportation Public Tender for the acquisition of public transportation services was launched on September 23 last year, and the public act of opening the tenders took place on November 25. TCM presented its proposal at four minutes past five on November 24, four

JUNE 2010

minutes outside the period stipulated in the tender, which is why the tender opening committee decided not to admit into contention the documents presented by the company, which currently operates one of the two transport concessions. In January, Chief Executive Fernando Chui Sai On rejected a TCM appeal. But the Court of Final Appeal considers now that “the suspension of the act of refusing to enter the proposal to tender does not pose grave injury to public interest specifically pursued by the act.” The head of the Traffic Affairs Bureau (DSAT), Wong Wan, said a team of legal experts is studying the verdict and, based on the outcome, the government will soon announce new plans. Five months shy of starting the new concessions for public transportation, Wong refused to comment on whether the October date is still valid.

JUNE 2010

KEITH MORRISON AUTHOR AND EDUCATIONIST - kmorrison.iium@gmail.com

The frog economy BALANCING THE SEXES CAN REDUCE STAFF TURNOVER, BUT MANAGERS ARE THE PROBLEM AND THE SOLUTION TO MACAU’S JOB HOPPING Job hopping and turnover are serious problems in Macau. In the fourth quarter of 2009, the staff turnover rate in gaming was 4.1 percent, in wholesale and retail it was 7.1 percent; in transportation, storage and communication it was 3.6 percent; while in the security services it was a huge 10.6 percent. In 2007, 30,400 employees changed jobs, 10.1 percent of all workers. ‘Dissatisfaction with remuneration’ was the principal reason, given by 61.5 percent of job changers. This is unsurprising, given median monthly earnings of only MOP7,800 (US$976) at the time. In 2008 (latest data) 39,200 people changed jobs, 12.1 percent of all workers. ‘Seeking better pay’, was the reason given by 56.6 percent of job changers, followed by 21.5 percent who cited ‘incompatibility with working hours/dissatisfaction with working environment’. Again, understandable, given median monthly earnings of only MOP8,000 (US$1,001) at the time. Job hopping seems to be a way of life in Macau, particularly for younger workers: 26.4 percent of job changers in 2007 were aged 25-34 and 28.3 percent of job changers in 2008 were aged 14-24 (latest data). Of course, people change jobs for many reasons, e.g.: more money; better conditions; higher status; promotion (prospects); better job security and job satisfaction; better work schedules and supervisor support; better person-to-job and person-toorganisation fit. Or they may change jobs to escape: stress; workplace politics; bad management and administration; workplace bullying; unethical workplace practices; poor communication; low staffing levels and high workload; little fulfilment and selfesteem; lack of voice; no control over work; low organisational commitment; boredom; powerlessness; imbalance of work and family commitments, and so on. In Macau, of the 312,400 workers in the fourth quarter of 2009, many were in low skill jobs (e.g. 71,800 in sales and service, and 56,400 unskilled workers), particularly women. There were very few women (proportionally) in senior positions (18,500 men but only 10,100 women as legislators, senior officials, professionals, directors and managers of companies), yet 47,200 men and 73,400 women were clerks, and 19,900 men and 35,500 women were ‘unskilled’. It is hardly surprising that there is little job satisfaction and high turnover if people can only work in lower-skilled, routine and boring jobs in Macau, and earn only low wages (median earnings in 2009: MOP9,000 per month (US$1,125). Why is turnover so high in Macau? Maybe the problem, as well as the solution, lies with management, as is often the case, and as seen above. What can be done? Studies from Australia and Belgium in 2004 and 2008 respectively suggest that managers need to ensure better workloads, improve relationships between supervisors and subordinates, and increase employees’ job JUNE 2010

satisfaction and commitment. A 2009 study in Taiwan put management communication high on the list. A 2010 study from Sweden shows that, contrary to earlier research, staff turnover reduces where the sex composition is more balanced, and that men and women prefer to work in heterogeneous rather than sex-homogeneous work settings. However, in Macau, sex-heterogeneous work settings are less likely to exist in many areas of employment, as the table shows (fourth quarter 2009). Type of Employment

2009 No.

Construction

Male Female

26500 2900

90.14 9.86

Transport, storage and communications

Male Female

11600 4100

73.89 26.11

Financial intermediation

Male Female

2400 4500

34.78 65.22

Real estate, renting and business

Male Female

16800 9200

64.62 35.38

Public administration, defence, social security

Male Female

13000 7700

62.80 37.20

Health and social welfare

Male Female

2200 5900

27.16 72.84

Education

Male Female

3800 8600

30.65 69.35

Source: Calculated from data from Macau’s Statistics and Census Service. This is crude data only. Balancing the sex make-up in work settings may not reduce turnover, as many factors affect turnover. However, one can speculate that Macau’s turnover rate could be reduced by: (a) better management and leadership; (b) better quality jobs and job satisfaction; (c) better pay and conditions; (d) better working hours and workplace environments; (e) a greater balance of the sexes in the workplace; (f) more women in senior management positions. Hardly rocket science, but why is it not happening? Maybe it’s because there are too many male bosses in Macau.

JUNE 2010

Economic Trends by JosĂŠ I. Duarte

Labour force: age and sex structure

TABLE 1 - Labour force: absolute variation M

(103)

25 20

We look now at the overall labour force figures over the last decade in terms of absolute changes in their composition. TABLE 1

15 10 5 0 -5 -10 2001

2002

2003

2004

2005

2006

2007

2008

2009*

The first table shows, for most of the period, a year-on-year increase in the workforce numbers, usually significant for both men and women. The exceptions are the recessive period in the earlier part of the decade (2002-3) and last year. Note, however, that in 2002-3 the figures are almost insignificant: the net effects are negligible. Thatâ&#x20AC;&#x2122;s less the case in 2009 when, in arguably more favourable circumstances, the effects were more pronounced. But still, a net loss of about 4000 people given the repatriation of high numbers of non-resident workers and the lull in new construction investment is not too significant. TABLE 2 & 3

TABLE 2 - Male labour force: net variation by age class 2001

(103)

2002

2003

2004

2005

2006

2007

2008

2009*

25 20 15 10 5 0 -5

14-24

25-34

35-44

45-54

55-64

65+

-10 -15

TABLE 3 - Female labour force: net variation by age class 2000

(103)

2001

2002

2003

2004

2005

2006

2007

2008

2009*

25 20 15 10 5 0 -5

14-24

25-34

JUNE 2010

35-44

45-54

55-64

65+

The age composition, however, displays a few patterns that should be a matter of concern (Tables 2 and 3) for men and women, respectively. Note that in both recessive periods the main losses in the labour force have taken place in the younger generations. In 2009, especially, the male labour force losses were clearly concentrated in the class ages below 45 years. There may be several causes for this but for our purposes here it suffices to say that those features underline the tendency to an aging labour force. Such a trend is probably not more pronounced because the working life of women tends to be shorter and the female labour supply is more frequently renewed, so to speak. Note that for ages above 55, the female contribution to the increases in the labour market decreases very fast. Over the decade, in any case, for both men and women, we register two clear patterns. That is, both the size and the age of the labour force move upwards. Beyond that, bear in mind, finally, that differences between the behaviour of the two sexes in our economy are not noticeably different from what is common in more developed economies.

35 Labour force: current vacancies

TABLE 1 - Employment in select sectors

Manufacturing Utility Transportation Finance Serv. Div Commerce Gaming Hotels and Restaurants

Every quarter, the DSEC carries out a survey on employment and vacancies for several economic sectors. That survey is naturally important as a gauge of firms’ labour needs. A word of caution is required however, concerning the aggregate figures used in the tables below. Some of the surveys take place in even quarters, others in odd quarters. In that sense, the figures cannot be added up, they do not provide an unambiguous snapshot of the conditions in the labour market at a specific point in time. They provide, nonetheless, a useful and clear enough picture about trends and imbalances in that market. TABLE 1

If we look at the latest figures, referring to the second half of 2010, what are its distinctive features? In the eight sectors covered (which amount to about 160,000 workers and exclude, notably, the public or social sectors), the three big ones – gaming, hotels and restaurants, and commerce – represent about 80% of the employment. With the demise of manufacturing, these are the ever more concentrated foundations of the local wealth.

TABLE 2 - Number of vacancies in select sectors

TABLE 2

Manufacturing Utility Transportation Finance Serv. Div Commerce Gaming Hotels and Restaurants

TABLE 3 - Vacancies: relative weight and unskilled workers

Now, if we look at current vacancies (Table 2) we see some interesting features. In particular, note that the number of vacancies in gaming is comparatively very small. They amount to just about 4% of the sector’s workforce. That is, so to speak, compensated by a significant unsatisfied demand in the other main sectors. Commerce and hospitality represent 70% of all existing vacancies. These figures suggest that gaming attracts most of the available and mobile labour force, a fact that deepens the difficulties already posed to the other sectors by the overall scarcity of labour. Note, in addition, that total vacancies for these sectors correspond roughly to the total figures of the unemployed in Macau. TABLE 3

% unskilled

% vacancy

(%)

30 25 20 15

That is particularly striking if we look to Table 3, which shows that a significant level of vacancies concern non-qualified personnel and therefore, should be relatively easy to fulfil. That share is especially striking in the hospitality sector. These figures point to a serious misalignment between the labour policy and economic realities.

10 5 0 Manufacturing

Utilities

Transportation

Finance

Serv. Div

Commerce

Gaming

Hotels and Restaurants

JUNE 2010

Economic Trends by José I. Duarte

Output and expenditure 2009 (in MOP) GDP current

169,343

million

Consumption

41,601 31,580 13,739 - 39,274 121,695 169,342

million

Investment

Trade balance: goods Trade balance: services GDP constant (2002)

million million million million

- 2.4 5.7 - 39.0 12.6 - 5.1 9.1 - 2.4

Latest (in MOP)

48,918

million

10,796 8,230 4,870 - 11,509 36,531 48,918

million million million million million million

% var

Notes

19.4 6.9

- 34.8 12.7 5.5 4.7 19.4

Q4 Q4 Q4 Q4

Money and prices 2009 January (in MOP) February (in MOP) Credit (in MOP) Deposits (in MOP) IPC/Inflation rate(*) AMCM base rate

30,608 million 212,153 million 101,064 million 207,247 million 101.40 base - 2008 0.50 %

% var

23.8 11.8 10.1 11.8 1.16 --

Latest

% var

30,893 million 210,201 million 104,860 million 204,812 million 103.01 base - 2008 0.50 %

20.5 9.2 14.4 9.1 1.88 --

Latest

% var

Notes February February February February March April, var

Population/Labour force 2009 Population Labour force Median wage rate (in MOP)

% var

542,200 329,200 8,500

- 1.3 - 1.5 6.3 - 0.1

3.0 %

Unemployment

542,400 323,300 9,000 2.9 %

- 0.7 - 3.0 4.7 - 0.9

Notes Q1 Q1 Q1 Feb, var

Construction 2009

228,874 Finished 1,406,242 Cement (Apparent consumption) 276,710 Transactions/Commercial (in MOP) 2,976 Transaction/Residential (in MOP) 21,517

Major sectors

Started

m2 m2 tons million million

% var

- 57.1 40.7 - 56.9 - 1.9 - 27.7

Latest

85,584 35,943 20,609 279 2,806

m2 m2 tons million million

% var

Notes

1719.0 434.0 - 29.3 3.3 372.0

March

% var

Notes

March March March March

Gaming 2009 Gross revenue (in MOP) Casinos Tables Machines

120,383 33 4,770 14,363

million

% var

9.6 2 18.7 21.1

Latest

13,666 33 4,811 14,503

million

57.1 0 0.9 1.0

March Q1, var, ytd Q1, ytd Q1, ytd

Tourism 2009

21,753,000 Average expenditure (in MOP) 1,616 Average stay 1.10 days Hotel rooms 19,259 Occupation rate 71.60 % Average Hotel stay 1.50 nights Visitors

% var

- 5.1 - 6.5 -9.8 -2.9 0.6

Latest

2,011,000 1,783 1.52 days 18,937 78.3 % 1.47 nights

% var

Notes

6.7 8.9 0.13 7.7 1.8 0.15

March Q1 Q1 February Q4 Feb, var

%var - % change on homologous period; var - absolute variation; ytd - % change, year-to-date; x - discontinuous series APRIL 2010 (*) Important note: The inflation base period has changed ( New base: April 2008 to March 2009 = 100) JUNE 2010

Sources: DSEC (Direcção dos Serviços de Estátística e Censos), AMCM (Autoridade Monetária e Cambial de Macau), DICJ (Direcção de Inspecção e Coordenação de Jogos)

Economic Activity

Government

million

% var

Labour

Imported labour pains Director of the Human Resources Office (GRH), Wong Chi Hong, says that reducing the number of foreign workers is no easy task, and the number of local human resources is not sufficient. Wong says a gradual approach is needed otherwise there will be disadvantages for the gaming industry affecting the wider economy. Wong added that the gaming sector had 15,878 imported workers at the end of September 2009, but the number was down to just 1,859 people at the end of last year. The senior positions of the gaming sector back then employed 1,138 imported workers; now the number has been reduced to just 165, he added.

Good news, bad news New figures show pay is up for many workers, but fewer people are being employed in key sectors ay has gone up year-on-year for people working in the manufacturing industry and also in hotels, restaurants, financial services, and the water, electricity and gas sectors. Official data from the Bureau of Statistics and Censuses (DSEC) just released under the ‘Labour and Wages Needs Survey’ for the first quarter of 2010 revealed the increases, but also showed a drop in the numbers employed in the manufacturing and clothing sectors. At the end of the first quarter of the year, 15,203 people were employed in manufacturing, a significant decrease – 22.7 percent – on the first quarter of 2009. The number of workers hired by the clothing industry totalled 7.679, a fall of 35.6 percent. In March 2010 the average pay for full-time employees - excluding bonuses and dividends - was MOP5,780, which represents an increase of 11.2 percent over the same months in 2009. Sewing machine operators earned an average salary of MOP3,480. Hotels and restaurants employed 48,287 people, an increase of 4.2 percent. Of those, 31,483 workers were employed in hotels or similar establishments. In March, the average pay for full-time work-

ers in the sector amounted to MOP9,970 translating to an increase of 1.3 percent. Hotel rooms cleaning staff were paid an average salary of MOP6,080. Financial services relied on 5,507 employees, of which 4,630 were in banking. Compared to the same period of 2009, the number of paid employees in this industry decreased slightly, by 0.8 percent. Up to March this year, the average salary of full-time workers in this sector amounted to MOP18,550, up 5.6 percent compared to same month of 2009. Bank cashiers earned an average salary of MOP10,760. The production and distribution of electricity, gas and water employed 1,057 people, a slight increase - 0.4 percent compared to the same period last year. The remuneration of full-time employees in March 2010 reached MOP22,230, marking an increase of 1.3 percent over the same month last year. At the end of March 2010 there were 1,457 vacancies in the manufacturing business, while the number of job vacancies in hotels and restaurants was 3,696. There were also 214 places to be filled in the financial services sector and 23 in the production and distribution of electricity, gas and water.

No fixed quotas The government will not establish specific quotas for imported labour industry by industry. Both the director of Legal Affairs Bureau (DSAJ), Andre Cheong Weng Chon, and the spokesman for the Executive Council, Leong Heng Teng said this was the case because of the different situations and needs of different sectors. As previously announced, a committee for the hiring of non-resident workers will be established to analyse the needs of each local industry and economic sector, Cheong said. The committee will be formed by government officials and representatives of labour sectors and employers, but it won’t include representatives of imported workers. Meanwhile, the government has a new bylaw to complement the recently enacted imported labour law. The by-law spells out the conditions that employers need to follow to get a permission to hire nonresident workers. Among them is the obligation for the employer to maintain a minimum number of local workers – the by-law lays down the criteria to define such number for each company. The by-law also includes a mechanism for the reassessment of the number of non-resident workers.

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GEORGE AKERLOF NOBEL LAUREATE IN ECONOMICS (2001). PROFESSOR OF ECONOMICS AT THE UNIVERSITY OF CALIFORNIA AT BERKELEY RACHEL KRANTON PROFESSOR OF ECONOMICS AT DUKE UNIVERSITY

Identity Economics A GREAT STRENGTH OF ECONOMICS IS ITS ABILITY TO EXAMINE HOW DECISIONS ARE MADE FROM THE POINT OF VIEW OF DECISION MAKERS. FOR EXAMPLE, ECONOMICS CAN EXPLAIN IN THIS WAY WHY CONSUMERS BUY WHAT THEY DO. IT ALSO OFFERS A PERSPECTIVE ON WHY EMPLOYEES WORK FOR SOME EMPLOYERS AND NOT OTHERS, WHY THEY WORK AS HARD AS THEY DO, AND, INDEED, WHY THEY GO TO WORK AT ALL. But in most economic analysis, the decision makers’ point of view is quite narrow. It starts with what people like and don’t like. People may have a taste for oranges or bananas, or a preference for enjoying life today instead of saving for the future. They then decide what to buy or how much to save, given prevailing prices, interest rates, and their own income. Economists have included in such analysis that people interact with others, but they have largely treated such social interactions in a mechanical fashion, as if they were commodities. For example, in the standard economic analysis of workplace gender discrimination, men do not like to associate with women on the job – in the same way that they might prefer apples to oranges. Likewise, the standard economic analysis of racial discrimination is that whites do not want to associate with non-whites, and so demand a premium to buy from or work with non-whites. But neither gender nor racial discrimination arises from purely personal preferences. Instead, they reflect social codes that tell people how they are supposed to think of themselves and how they are supposed to interact with each other. People take such codes seriously. For example, in the case of gender, those who identify as men also want to behave as men are supposed to behave; those who identify as women want to behave as women are supposed to behave. When we examine people’s decisions from the perspective of their identities and social norms, we get new answers to many different economic questions. Who people are and how they think of themselves is key to the decisions that they make. Their identities and norms are basic motivations. We call this approach identity economics. To grasp the relevance of identity economics, and how it differs from standard economics, consider an otherwise puzzling fact. Men and women in the United States smoked cigarettes at vastly different rates at the beginning of the twentieth century, but these rates largely converged by the 1980’s. Women now smoke just as much as men. We cannot explain this convergence in terms of standard economic arguments, such as changes in relative prices and incomes, because no such changes were sufficiently large. But we can explain it if we ask how people think about themselves – that is, if we examine changes in gender norms. Women early in the twentieth century were not supposed to smoke; it was inappropriate behavior. By the 1970’s, however, advertising campaigns targeted “liberated” women, telling them that smoking was not only acceptable, but desirable. JUNE 2010

This example is just the tip of the iceberg. Taking social norms seriously has consequences that pervade the economic system, and also our lives more generally. Consider another example: military pay versus pay in civilian firms. Overall military pay is relatively flat – that is, it does not go up and down depending on performance, and it is also lower than for comparable positions in civilian firms. Nothing in standard economic analysis can make sense of such a pay structure – or of the rituals that are central to military tradition. But with identity economics it all makes sense, and we gain an entirely new perspective on work incentives, not just in the military, but in all pursuits. In organizations that function well, employees identify with their work and their organizations. If employees feel more like insiders – a key purpose of military rituals – there is little need for incentive pay or pay-forperformance schemes. The military changes the identity of its recruits, inculcating in them values such as duty and service. In the civilian world, too, the most important determinant of whether an organization functions well is not the monetary incentive system, as standard economic models would imply, but whether its workers identify with the organization and with their job within it. If they do not, they will seek to game the incentive system, rather than to meet the organization’s goals. Likewise, good schooling occurs not as a result of monetary rewards and costs – the stock-in-trade of conventional economics – but because students, parents, and teachers identify with their schools, and because that identification is associated with learning. Moreover, whether students identify with being in school becomes the major determinant of whether they stay or drop out. Given this, education policy should look at what some successful programs have done to establish a school identity that motivates students and teachers to work according to a common purpose. If we focus on training teachers in how to inspire their students to identify with their school – rather than teaching students to take standardized tests – we just might be able to reproduce these schools’ great results. As economists and policymakers, we could be content to continue looking only at prices and income and related statistics to explain people’s decisions. In some circumstances, that might be enough to understand what is happening. But in many other situations, we would miss major sources of motivation – and thus would adopt useless, if not counterproductive, measures aimed at producing the outcomes we seek. Identity Economics provides the broader, better vision that we need.

JUNE 2010

Politics

Archive photo

Keeping secrets Former Chief Executive Edmund Ho Hau Wah has been called as a witness in a trial related to the Ao Man Long corruption scandal. The law says that only the current leader of the government can allow the disclosure of confidential information. But who defines what is a secret? BY ISABEL CASTRO

n the 10 years since it came into being, the Macau Special Administrative Region hasn’t produced any law to determine who classifies what is, and what is not, a confidential or reserved government matter - a sort of mini-state-secret. Laws did exist prior to 1999, but they were revoked with the establishment of the MSAR, and have not been replaced. So far, the question has

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not been raised – in fact, during the first decade after the handover of Macau, apparently there was no need for such legislation. But things have changed. Last April, João Miguel Barros - the lawyer of one of the defendants in a trial related to the Ao Man Long corruption case – asked the court to call the former Chief Executive to be a witness. Also, the expresident of the Legislative Assembly, Susana Chou, has

been enrolled to give a statement on this judicial process. During the trial session in which the question was debated, the representatives of the Public Prosecutor’s Office pointed out, correctly, that Edmund Ho Hau Wah can’t speak about confidential matters without the prior approval of the current Chief Executive, Chui Sai On.

Chief’s position A law issued last year - just

before the end of Ho’s reign - states that the former leader of the Macau government (as well as several other main politicians, such as the expresident of the Legislative Assembly) can not divulge confidential matters that were disclosed to him while he was in his post, without the permission of the present Chief Executive. In the same trial session, the lawyer who wants to question Ho and Chou gave

Before 1999... L

aw no. 6/94, revoked with the establishment of the MSAR, was the document that gave Macau’s Governor the power to decide what should be classified as a state secret. The legislation listed how a secret should be classified. Article no. 3, outlined the security classification, which was a task to be executed by the President of the Republic, i.e. Portugal, the president of the Republic’s Assembly, the prime-minister, ministers and, last but not least, by the Macau Governor.

… and after L

aws governing what the top political leaders can or cannot do after their term in office were approved last year, just before the end of Edmund Ho Hau Wah’s second term as chief executive. Law no. 22/2009 of December 17, 2009, provides that, during criminal procedures, the former chief executive and other ex-politicians have a duty of secrecy regarding confidential or reserved facts that they had knowledge of during their period of public service. One exception is professional secrecy. The current chief executive might allow the disclosure of these secrets. In court, this creates a difficult situation since it would be necessary to provide to the government leader, in advance, the list of matters to be approached during the trial session, in order to get the approval for the disclosure of the secret matters. But the law does not identify who decides which facts are confidential.

a guarantee that he is not interested in secret issues. Barros said that he only wants to ask the ex-leaders a few questions about policies that have already been made public in the policy address debates. Nevertheless, the lawyer added, the former chief executive always retains the “moral reserve” not to speak about a fact considered as confidential. It seems the “moral reserve” of former MSAR leaders is the only mechanism by which a secret can be defined.

Not enough Legal experts who spoke to Macau Business say that there are diffused regulations that might act as a legal basis to classify information as confidential or restricted – such as those of the Civil Code that pro-

tect the right to privacy but these procedures are not enough. On one hand, there are no rules about what kinds of facts should be classified as confidential or restricted; on the other, the MSAR does not have an organism with the power to make that classification. This legal flaw might compromise the legality of the administrative acts used to define the confidential facts, say the same specialists. In the final analysis, there is no law that entrusts the current chief executive with the mission of determining what should be kept inside the walls of government. Up to the 1999 handover, the colonial Governor held that authority. It seems that the MSAR may have forgotten to issue legislation covering the subject.

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Cover Story

As its booming economy rides high on the wave of record casino receipts, more and more people are falling through the cracks in Macau’s struggling public healthcare system. Charges of negligence and malpractice against the Conde de São Januário hospital are on the rise, as doctors warn they lack the facilities and space to deliver patients the care they deserve

Photo: Luís Almoster | MSPagency.org

BY VANESSA AMARO

A case for treatment JUNE 2010

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Cover Story

n 2006 a young mother went through a seemingly normal birth at the Conde de São Januário Hospital. Seemingly normal, because when she arrived home she began to suffer terrible bleeding from the incision which had been made to ease the passage of her baby. Months and years later, the woman is still suffering from depression, not surprising given that her overriding memory of what should have been a joyful time, is pain and agony. The name São Januário comes from San Gennaro, the patron saint of the Italian city of Naples, who legend has it, protected people from pests and gave them strength and health. But, in Macau, the hospital that bears his name is increasingly becoming home to alleged botched operations, treatments, complaints and lawsuits.

Death in childbirth Hoje Macau daily was told of at least seven pending legal cases against the hospital at the moment, all of them involving medical negligence. In a case heard in January 2005, the Administrative Court ordered that the Health Services and a nurse had to pay MOP3.4 million in damages to a JUNE 2010

father and son, because their wife and mother died after giving birth due to a haemorrhage. Her death could have been avoided if the nurse had measured her blood pressure or evaluated the contraction of the uterus – basic post-partum procedures. The woman, who at the time of delivery in 1994, was 33 years old, also suffered severe bleeding and the medical team was unable to provide an adult catheter to give a transfusion. When she suffered cardio-respiratory arrest, there

was no equipment on hand to revive her. After manual cardio massage, her heartbeat recovered, but she did not pull through. In the case of the woman who opened this story, health services will face another large sum in compensation if they are found negligent. A doctor who knows the case explains that simple medical procedures were required: “You could learn an episiotomy from a book, it is such an easy procedure.” In another case involving obstet-

Not a pretty picture T

he Conde de São Januário Hospital was inaugurated on November 29, 1989, and boasts 65 million square feet spread over four blocks. It caters to an area with a population of 430,000, according to its own data, and has 476 beds, which means that there are 1.1 beds for every 1,000 people. According to data provided by the Health Services for 2007, even taking into account the three existing hospitals in Macau, which have a total of 1,014 beds, the average doesn’t exceed 1.9 beds per 1,000 inhabitants. Putting this data into a global context, Macau’s situation is far from desirable. According to a 2008 report by the World Health Organization (WHO), the international average number of beds is 3.0 per 1,000 inhabitants. Although there is no data available solely for the Asian region, one only needs to compare the SAR with some Asian countries to realize the existence of significant differences with Sri Lanka (2.9), South Korea (8.6), Japan (14.1) or even the mainland (2.2), just to name a few.

45 rics, in May 2006, a woman went to São Januário to have an IUD (intrauterine device) removed and left with a perforated uterus and bowel. Indeed, cases of negligence or malpractice seem to be taking on an increasingly larger dimension in Macau. The litany goes on: A boy who cut his finger, was seen by a trainee and left the hospital with a paralyzed finger; a man with a fractured skull and internal bleeding was treated as if he were merely a drunk and died; a girl with a platelets deficiency that was treated with hormones fell into a coma six years ago; and a man who was admitted for a highrisk heart operation died after falling in the corridor.

crease will only happen in a year and a half or two years after expansion work. The problem lies in the wards,” says the hospital source.

Disgraceful The observation ward currently has 27 beds for more serious cases and another three dozen scattered across the hall at the ER. Even a doctor agrees that it’s far from the ideal place for a patient: “Personally, if one day I have signs of a stroke or heart attack, do not take me to

the observation ward. I’m sure I would die. Even the minimum standards you would expect are not apparent. “It’s very noisy, with machines beeping all the time, a hustle of people accompanying the patient coming and going, and no control whatsoever over the number of people for each patient or the time they remain with the patient. In conclusion, it’s a disgrace, it is a true marketplace environment,” says the doctor. However, in the face of complaints

Frontline failings Most of the answers to the questions about what is going wrong inside Conde de São Januário Hospital, need to come from just there. But some need to come from outside the medical facility. Why do the doctors make such alleged mistakes? Why are there so many negligence claims against the nursing team? The newspaper spoke to people on the inside. Without wanting to identify themselves, the professionals go into a detailed - and often distressing - analysis of what has become of the public health system in Macau in the 10 years since the handover. “These problems are largely a matter of the crass irresponsibility of those in power. Macau did not develop, Macau has grown, and where health care is concerned it has only hypertrophied. How can a single public hospital take care and meet the needs of all the residents plus the thousands of tourists who every day pass through the city?” asks one medical professional. The last decade has seen no planning for the expansion of hospital beds and those that were added were hardly noticed. “Since 1992, there hasn’t been an extra bed put in the wards. This means that patients have to spend more time waiting in the emergency room, where beds were added ad hoc. Extra beds were added to rooms physically structured for only three beds in the wards of greater demand – it’s a mess. “The problem, however, is not in the emergency room, which will have an additional 100 beds in three months in Taipa. At São Januário, such an inJUNE 2010

Cover Story

from patients, the same doctor surprisingly considers obstetrics and gynaecology services are in a good condition compared to other specialties: “There has been a reduction in the birth rate, which means that this facility has smaller waiting lists. It doesn’t mean there was any investment whatsoever in this area. Basically, they maintained what they already had,” the doctor explains. Not enough space, equipment, or medical staff, and a wage structure which is hardly appealing, but still the patients continue to pour in. “You can’t blame the doctors and

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nurses alone for the errors. Everyone must see the conditions under which we are operating. It’s as if we were trying to stitch a patchwork quilt that insists on coming apart. We don’t have the time to properly attend to patients when hundreds more are waiting. Mistakes happen in all areas, but in medicine we shouldn’t be allowed a margin for them to happen. Our emergency landing has been the courtroom,” complains one specialist. Who wants to be a doctor in Macau? In a word? Nobody. The mainland and neighbouring countries are experiencing increasing difficulties in hiring

good health professionals. Meanwhile, in Macau’s public hospital system, a doctor earns a third of their equivalent in Hong Kong and half that in major Chinese cities. “Not even the Kiang Wu Hospital can convince professionals from Beijing, Shanghai or Guangzhou to come. They have to rely on doctors from the interior, with training from who knows where,” says a member São Januário’s board. Over the past eight years the hospital hasn’t produced a single specialist. Later this year, about 30 will start their specialised internship, but the number is

47 The medical profession considers that there hasn’t been sufficient attention and consideration taken by health services, and pray now that Chief Executive Fernando Chui Sai On and legislators will act. The profession is expecting an endless war with the authorities: “Already, on May 1, doctors joined the demonstrations. There is utter disregard for the effort that health professionals have made for the health of Macau. All of us feel like a band-aid, to be discarded after use,” the doctor complains, voicing his colleagues’ feelings.

Epidemic fears

insufficient to meet the needs of São Januário. “We need 80 to 100 new specialists and we ought to train about 200 new ones for services to function minimally”, one hospital source says. Since the new specialists will take five years to train, the question arises of how to find medical professionals for the new hospital being built in Taipa: “It seems as if there is someone wanting to plot to overthrow the public health care system in Macau. Given what has been done, in other words, nothing, that’s the only conclusion one can derive from it”, complains one doctor, adding that “the whole class is being pushed onto a precipice”. The enthusiasm and morale of doctors remains low and they are worried about the future.

Medical staff at São Januário are also worried about their ability to handle a major public health crisis, such as an epidemic like SARS or the H1N1 virus. There is no unit for infectious and/or contagious diseases, a subject that began to be studied seven years ago and so far has yielded nothing concrete. “There were plans to build a 17-story building especially for infectious and/or contagious diseases. But then it was concluded the building couldn’t be so high and that was that. The shame is that there’s been a commission to study this issue for years and so far it hasn’t so much as moved a finger. And, in seven years, we could have built a pyramid!” notes a medical professional at São. Januário. An epidemic could be catastrophic for the city if the current situation continues: “These people that are in power should all be taken to an international court to be held responsible for this embarrassment that is the public health care system. We have a first-world rate of GDP, but our public health care system is certainly third world rate,” says the doctor. The Health Department and the Board of the Conde de São Januário Hospital did not comment.

Accident prone IP SI HAI was admitted to hospital for cardiac surgery. He was in intensive care but didn’t reach the operating table. The nurse who took care of the patient said she gave him the right to privacy when he visited the bathroom. Ip fell in the hallway and died from the fall. His widow sent a letter to the government a few weeks ago to request an investigation. A 40 year old woman went to Kiang Wu Hospital with H1N1 influenza symptoms. The results came back negative. Days later, she returned to retake exams and the disease was confirmed and she had also contracted pneumonia. She was sent to the Intensive Care Unit at São Januário, but did not make it. The Health Services deny negligence. ABREU HUMBERTO died of aggressive myeloblastic leukaemia in February this year. His wife, Isabel, sent a letter to Macau Hoje daily detailing her ordeal and suggesting there may have been medical negligence. The widow points to inhumanity and a lack of professionalism in dealing with her husband and says her loved one, who had virtually no defences, was not isolated but placed in the ward with other patients. CHAN KWOK SAM claims her 15 year-old daughter fell into a coma in 2004 after being mis-diagnosed. The teenager suffered from thrombocytopenia (platelet deficiency) and was given hormones for 27 months. She suffered a cerebral haemorrhage and fell into a coma. The medication she was taking could only be used for a maximum of six months. Her father has asked the chief executive to intervene in the case. WONG WUN CHUN’s colon was perforated during a colonoscopy to check her pelvis. The perforation was sutured and there were no major complications. Still, the patient filed a lawsuit against the hospital asking the court for compensation, but lost. In 2009 two newborns were exchanged in the obstetrics services. The hospital considered the exchange an act of negligence by one of its employees who did not strictly comply with procedures for identifying infants. The hospital apologised and opened an internal investigation against the employee. A man was found at Fisherman’s Wharf with signs pointing to him being inebriated. He was taken to São Januário and treated as if under the influence. However he died and later it was discovered that that he, had actually suffered a fractured skull and had internal bleeding. A woman underwent a minor procedure to remove an intrauterine device (IUD) and left the hospital with a perforated uterus and bowel. Without being able to reach a peaceful settlement with the São Januário Hospital, in 2007 she started legal action and is about to get her day in court.

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Cover Story

This is for you, my love A tribute to Humberto Henrique Pinto Fernandes de Abreu (25.12.1948 – 27.02.2010)

hree months have gone by since Humberto passed way. It’s not easy to wake up, live and lie down in the absence of someone who has shared my life for the last 12 years. Humberto was always a daily renewed puzzle, a constant challenge, a safe haven and a total joy, because of his philosophy of life, because of his solidarity, because of his intelligence, because of the unexpected. Those who knew him know exactly what I mean. These few lines are dedicated to him and to all who might benefit from their contents. I’m sure each one of you will have your own reading. On February 25th, 2010, at about eleven in the morning, I arrived with Humberto at Macau’s public hospital, Centro Hospitalar Conde de São Januário (CHCSJ) emergency room. We were met by the usual struggle, the usual endless waiting, the usual mess, the usual deafening noise, the usual chaos, and the usual filthiness. The symptoms were serious and, both of us being Portuguese, I pleaded for the help of a Portuguese doctor. The answer came sharp and negative, apparently they were too busy. Someone else would handle the situation. We were finally called into the consultation room and the Chinese doctor began the process by requesting the usual basic blood work, urine sample, X-ray and Ultra Sound, without bothering to do a basic physical check up, even though Humberto’s body was already developing unexplainable bruises. Time passed, shifts shifted, or so it seemed, and about five minutes to six in the evening, after a great deal of insistence, I managed to speak with another Chinese doctor who, after looking at the computer, told me, in broken-English, that the blood work results had not come through yet. It didn’t seem normal, after all those hours of waiting, for nobody to have come up with something and therefore I demanded an immediate answer. Three phone calls later, the answer came cold as ice, “They check again, maybe leukaemia”. Maybe what? What kind of person, much less a doctor, makes a statement like that? Would it be the same if the patient was the doctor’s husband or wife? Would it be said in the middle of a total chaos like that? Just like that? Without even being certain of the results? I reacted as any normal mortal would react to such a lack of feeling, professionalism and humanity. Sue me for shouting at an asshole doctor who is not worthy of the profession. Someone, I don’t recall who, came to calm down the situation and suggested that we go home until they had the final results. Someone would call us to return to the hospital. And so they did, and so we went back about seven thirty. Confirmation of aggressive myeloblastic leukaemia was given to me by the doctor who had refused to see Humberto in the morning, there, in the middle of the chaos, no privacy, no nothJUNE 2010

ing, me sinking down to the floor to the point I was given a sedative. Finally, he was admitted to an isolated room next to the observation room since Humberto’s defences to fight the disease were nonexistent. I never saw that doctor again, not even after Humberto’s death. I saw others, many others, all indifferent to the seriousness of the situation. Next day, February 26th, the situation became more and more serious and Humberto was becoming critically ill. That room was hell on earth and the noise was unbearable, despite the posters recommending silence. Helpers shouting and tossing bed-pans, nurses shouting, eating and joking at a desk placed right at the entrance to the room, a truly surreal scenario. I asked, several times, for some composure and silence without success. In the middle of the afternoon, a thick-headed clerk burst into the room saying, “go up stairs pay money”. I said I would go as soon as possible. Besides being very sick, Humberto was a Macau resident for 28 years and wasn’t about to get up and run from the hospital without paying. Five minutes later, another clerk arrives, one of the few that actually felt my concern, gently informing me that due to the malignant sickness, Humberto had free medical assistance. I should go up stairs next Monday with a photo and ID card to be given the free health care card. The situation was getting worse and about six in the afternoon, Humbertos’ brother and I spoke with the haematologist, a Portuguese doctor, in the middle of the corridor, without the minimum dignity or conditions to have such a conversation. The explanation was that his type of leukaemia had been precisely determined some years ago and, should his heart be fit for chemotherapy, he might have a chance. It wouldn’t be easy, but who knows. I looked into the doctor’s eyes and asked what I could expect. All I got were evasive answers. The doctor disappeared, I never saw him again. The heart exam was thoroughly done, and the doctor said it was going well. Not a young heart, of course, but pretty much working steadily and with no signs of problems. Good for the catheter insertion the next day and to proceed with the chemotherapy. I understand doctors are not wizards. What I don’t understand is that with so many years of experience they couldn’t properly evaluate the seriousness of a situation like Humberto’s. I don’t understand why nobody was available to follow his case permanently, non-stop, and why he wasn’t eligible to be taken to the intensive care unit. Instead, he was looked after by me, Jorge, Irene, Loly and Helder, and all the friends who supported him, hugged him, comforted him. Not even when the vomit became bloody, did someone care to tell me if it was normal in his situation. I went up and down that damned hospital looking for an answer. I went up to the hospital’s Lab and pleaded with the clerk to get in touch with the haematologist who, so I was told, was long gone.

49 I asked them to call his cell number, er, cried for help. Nothing, nobody cared. Nott even the neurologist, who had assisted Humberto mberto a few years ago, who I saw in the OR, R, would care. He simply turned his back on me without a word when approached ed him for help. About eleven thirty at night they told me Humberto was going too be taken to the second floor. Actually, y, I was informed by the helpers, maybe be nurses, I can’t precisely remember er a doctor telling me that. Then wee went from elevator to elevator, up and down different floors, like they didn’t know exactly where to take him. We finally arrived at a ward with three beds, two of them already occupied by other patients. I brought up the issue ue of isolation and Humberto’s vulnerability rability to disease. It didn’t matter, there were re no rooms, this wasn’t even the proper ward, it was borrowed from whoever, and it seemed they were doing ng us a favour. Six, I repeat, six, nurses and helpers, took about 10 minutes to move Humberto from one bed to the other, not before asking me if he could do it by himself. I couldn’t believe what I was hearing. All IV’s were pulled out with mishandling causing serious bleeding, due to the almost nonexistent level of blood platelets and lack of coagulation. Hush, hush, run, run, and the worry was that I wouldn’t witness what was going on, as they constantly insisted that I wait outside the ward. After the situation was controlled, they told me I couldn’t stay with Humberto. I said the doctor at the ward had told me otherwise, but he had left without signing the authorization. A piece of paper that in the public hospital is more important than one’s life. I mentioned my anxiety, after the experience in the OR, where, for instance, up to five bed pans where left on the floor at any given time. Where the life monitors would beep without anyone checking what was going on. Where even the shitty plastic bags for throwing up in were rationed, or so it seemed, and so on. The answer came, again in broken-English, “up here we are professionals!” Shame on you! I pleaded to be called on my cell when anything at all changed. And so they did, at a quarter to seven in the morning saying, “Man not well”. I flew to the hospital but the concept there for ‘not being well’ is to be dead. I still watched a manual cardiac massage, like we were in the jungle and not in a hospital. Now, with the distance of three months to reflect, I demand answers to the following questions: Why didn’t they have a defibrillator in the ward? Why did they keep Humberto in a ward, without the minimum emergency equipment? Why wasn’t he taken to the intensive care unit in the first place? Why didn’t they let me stay there? Why are they so cold and cruel? One thing is certain. As long as I’m alive, my conviction is that if someone had been there, not necessarily me, and had sounded the alarm, Humberto would be alive and carrying on

with the chemotherappy as planned. Above all, I will never forgive them for ne the fact that I was not able to be at Humberto’s side during his last hours life. That’s a shadow that of life Macau health the damned da have cast upon care services se me for the t rest of my natural life. Surprisingly, on April Surpr 2010, two months and two 29th, 2010 Humberto’s death, an days after H arrived in my mail box, envelope arr from Macau’s Special AdministraHealth Care Services, tive Region H “ToP F ABREU, HUMaddressed: “To Inside was an BERTO H Relative”. Rela paper, folded in half, sayA5 piece of pape ing: ABREU, HUMBERTO H “ToP F ABRE Relative” We wish to express our deep condolences for the loss of your loved one. May time alleviate your pain and heal your scars. Centro Hospitalar C. S. Januario – Associated Unit No signature. Thanks but no thanks. I don’t accept. I would have thanked them if they had been professionals. I would have thanked them if they had cared for Humberto properly, with attention, with dedication, carefully and with humanity. I would have thanked them if they had called me when I could still have comforted him as he passed away. I would have thanked them if they had been coherent and had not demanded I pay the bill, once again, to release his body from the hospital, after telling us he had free health care. I would have thanked them, a lot. This being the case, I consider their attitude an insult to Humberto, to his memory, to me and to all our family. I can’t finish this small tribute to Humberto without mentioning the place where he tries to rest, the Coloane Cemetery. I go there every week, different days, different times. Invariably, I’m confronted with the disrespect of a shooting-range next to the cemetery. The sound of gunfire is constant, from the most discreet to ones that sound like canons. RIP – Rest in Peace? Not for the ones buried there, nor for those that go there to pay their respects, trying to spend some minutes, or hours, reflecting and talking with their loved ones. In Macau, it’s not enough to endure the noise of the endless construction in our apartment buildings, in our offices, in the streets, at the hospital. It’s not enough to put up with the pianos, the TVs, the sound systems, the mahjong playing of neighbours, at all times. In Macau, the disturbance goes beyond death, with gun salutes that are not in anyone’s honour. To all Humberto’s friends, to all my friends, to all our friends, I deeply thank you for the comfort and support that was given to me and the family at such a difficult time. This is for you, my love. Isabel JUNE 2010

Society

How others see us A survey which gauges how Hong Kong people see the governments and people of the other parts of greater China has thrown up some interesting results BY KAHON CHAN

s well as having a pretty good opinion of the way they are governed themselves, by and large, Hong Kong residents have a relatively good opinion of the Macau government, compared to the three other administrations in greater China. However, the standing of both the government and the people of Macau has been slowly falling since the 2008 financial crisis. The University of Hong Kong Public Opinion Program (POP) began tracking the sentiment of the other SAR’s residents regarding the governments of the region in the late 1990s, although the government of Macau has only been included as a regular since November 2004. The evaluation of the sentiments of the people of Hong Kong, the mainland, Macau, and Taiwan, began in December 2007 and the survey has been conducted twice a year.

Positive response In the latest survey, carried out in May, 1,018 people were contacted by telJUNE 2010

ephone, of which 34 percent indicated positive feelings towards the government of Macau, while negative views were only given by 15 percent of those polled. This was the best result out of all four governments, with only 32 percent professing a good image of the central government, 23 percent saying they liked the government of Hong Kong, and only 19 percent endorsing the actions of Taiwan’s government. Significantly, 26 percent of all respondents have a negative view of their own government.

Media and perception An evaluation of the results indicates a variable trend in the perception of the Macau government. When included for the first time in the polls in 2004, 57 percent of respondents had a positive view of the Macau SAR administration, while the next year a staggering 68 percent of respondents said they liked Edmund Ho Hau Wah’s administration. This only fell slightly to 66 percent in 2006. But the arrest of Ao Man Long

was a blow, just 36 percent gave positive evaluations in May 2007. Notwithstanding, the second cheque distribution program by Edmund Ho announced in November 2008 apparently gained the approval of Hong Kong residents, with 50 percent of respondents giving the thumbs up to Ho’s administration in a poll conducted that same month.

People power According to POP polls since December 2007, the percentage of respondents from Hong Kong who have a negative view of the people of Macau has been a stable 2 to 3 percent, while the positive evaluations fluctuated between 43.8 and 51.2 percent. However, the last poll indicated the lowest standing for the Macau people among respondents of Hong Kong - only 40 percent were positive. The people of Hong Hong Kong mostly have a good image of themselves - 40.3 percent positive evaluations, while 22.4 percent do not like mainland people.

JOSÉ I. DUARTE ECONOMIST, MACAU BUSINESS SENIOR ANALYST - jid@macaubusiness.com

Shooting the messenger THE ON-GOING CRISIS IN THE EUROZONE HAS GIVEN RISE TO AN ASSORTMENT OF EXPLANATIONS. The most common are those that explain the events as being mainly the outcome of the wild behaviour of financial markets and, in particular, a conspiracy by international speculators. Implicitly, and sometimes explicitly, they point to the need for much tougher regulation of the financial system. However, blaming speculators, real or presumed, for this crisis is to confuse cause and effect. Speculators are those who prey on the weaknesses of others, trying (and sometimes achieving) profits that are somehow considered unfair. In this sense, the word carries a very negative charge. But even in the negative sense used in this case, speculation is more of a symptom than the disease. The essential starting point should be different. It makes much more sense to focus on the sources of the weakness(es) presumably exploited by the speculators, than to jump to swift moral judgements about how this or that economic agent may benefit from them. If we do that, we cannot fail to realise that some European governments have reached, or are reaching, levels of debt that, to put it politely, can lead reasonable people to question their ability to satisfy the corresponding obligations. In addition, in some cases, high levels of debt coexist with serious difficulties or reiterated unwillingness to either increase tax collection or impose stricter controls on expenditures. Governments are not forever dispensed of financial discipline, and such situations cannot last forever without prompting changes in the behaviour of markets. For mismanagement and fraud, private managers can be fired or sent to prison. Those practices cannot be deemed acceptable if made by governments even when they do so in the name of the all too easily invoked “common good”, which in fact is more often than not stated but not demonstrated. If we focus on the causes, it becomes apparent again that the current institutional arrangement of the Eurozone has a fundamental weakness that can only be circumvented with a strong sense of responsibility, solidarity and financial rigor by all its members. And that’s something that the current crisis has shown to be strongly missing. When the monetary union was created and the ECB put in charge of the monetary issues of the members, this much was obvious: the solidity of the currency hinged strongly on the discipline shown by the members in their fiscal and budgetary matters. A discipline which all members solemnly declared themselves determined to respect and preserve. Note that other courses of action might have been chosen. One could have made access to the monetary union more restrictive, excluding some less stable or reliable economies – something deemed to be politically undesirable – or could have created some more stringent mechanisms for the supranational control of the members’ economic policies – which was deemed to be politically impossible. This essential tension is still unresolved today and is unlikely to be easily or speedily overcome. The diversity of

the economies and the sensitive issues of sovereignty and autonomy dictate that there is no easily definable or acceptable solution. The crisis has, however, already shattered assumptions about the behaviour and responsibilities of national governments; the strength and scope of the solidarity among members; and the roles and duties of the community institutions. In some sense, we have already entered uncharted waters. Speculators of whatever kind, will be the least of European worries if solutions that are perceived as solid, viable and credible cannot be found without delay. Speculators that bet against institutions, markets or policies that are fundamentally sound, soon find themselves out of business. Those mean speculators we like to blame for our ills will only make a killing if European leaders and institutions fail. Blaming them amounts to no more than, at best, a variation of the “shoot the messenger” tale and, at worst, a crude attempt by European governments to turn attention away from their own failings. And note that nothing in this narrative contributes to actually solving the existing problems. The potential for social and political instability is there, the economic and financial dangers are serious. The social and political stresses are real: that much is certain. But we would all gain something if the major players tried to keep cooler heads and focused on the issues that really matter and avoided stoking unnecessary fires and creating dispensable diversions. JUNE 2010

TBA : To be advised

6th Asia Pacific Tourism Association (APTA) Annual Conference Date: Venue:

June

G2E Asia (Global Gaming Expo Asia 2010) Date: Venue: Organiser: Address: Tel: Website: E-mail:

8th – 10 th The Venetian Macao-Resort-Hotel AGA | Reed Exhibitions 39/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (852) 2824 0330 Fax: (852) 2824 0178 www.g2easia.com shermen.ho@reedexpo.com.hk

Asian Business Aviation 2010 Date: Venue: Organiser: Address: Tel: Website: E-mail:

9 th – 11th Macau Business Aviation Center Reed Exhibitions 39/F,Hopewell Centre,183 Queen’s Road East, Wanchai,Hong Kong (852) 2824 0330 Fax: (852) 2824 0178 www.asianbusinessav.com yolinda.wong@reedexpo.com.hk

International Hotel Investment Forum 2010 Asia Pacific Date: Venue: Organiser: Address: Tel: Website: E-mail:

14th – 16th The Venetian Macao-Resort-Hotel Questex Asia Limited 501 Cambridge House Taikoo Place, 979 King’s Road, Quary Bay, Hong Kong (852) 2559 2772 Fax: (852) 2559 7002 www.ihif_asiapacific.com jdu@questexasia.com

HA+DExpo (The Hospitality Architecture + Design Exhibition and Conference) Date: Venue: Organiser: Address: Tel: Website: E-mail:

17th – 18th The Venetian Macao-Resort-Hotel Questex Asia 501 Cambridge House Taikoo Place, 979 King’s Road, Quary Bay, Hong Kong (852) 2559 2772 Fax: (852) 2559 7002 http://hadexpo.questexevents.net/ jdu@questexasia.com

Global Management Challenge 2009 International Final Date: Venue: Organiser: Address: Tel: Fax: Website: E-mail:

18th Khanty Mansiysk, Russia Macau Management Association 9/F ACM Building, 175 Rua de Xangai, Macau (853) 8296 0708 (853) 2832 3267 www.gmc-asia.com gmc@mma.org.mo

July

Asian Infrastructure & Property Development Summit Date: Venue: Organiser: Address: Tel: Website: E-mail:

: A Macau Business partner event

5th – 7th The Four Seasons Hotel Macao Marcus Evans CP21, Suite 2101, Central Plaza, 34 Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia (603) 3272 6635 Fax: (603) 2723 6601 www.marcusevanskl.com angelikab@marcusevans.com

13th – 16th Institute for Tourism Studies & Sofitel Macau at Ponte 16 Organiser: Institute for Tourism Studies Address: Colina de Mong Há, Macau Tel: (853) 8598 3049 Fax: (853) 2855 6925 Website: www.apta.asia E-mail: iftpr@ift.edu.mo

Gaming Asia Expo Date: Venue: Organiser: Address:

15th – 16th Marina Bay Sands Singapore ComExpo 10 Bukit Batok Crescent, #08-08 The Spire, Singapore 658079 Tel: (65) 6316 1060 Fax: (65) 6316 1015 Website: www.comexpo.com.sg E-mail: gae@comexpo.com.sg

World Gaming Executive Summit, Europe Date: Venue: Organiser: Address: Tel: Website: E-mail:

14th – 16th Eurostars Madrid Tower Hotel, Spain Terrapinn Ltd Wren House, 43 Hatton Garden, London, EC1N 8EL 44 (0)20 7092 1000 Fax: 44 (0)20 72421548 www.terrapinn.com/2010/gamingeu julia.wallace@Terrapinn.com

Integrated Resorts & Entertainment Date: Venue: Organiser: Address: Tel: Website: E-mail:

19 th – 20 th Marina Bay Sands, Singapore Marcus Evans CP21, Suite 2101, Level 21, Central Plaza, 34, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia (603) 2723 6736 Fax: (603) 2723 6699 www.marcusevans.com estherw@marcusevanskl.com

Sportsbetting and Lotteries Asia Date: Venue: Organiser: Address: Tel: Website: E-mail:

20 th – 22nd Hong Kong Beacon Events 20/F Siu On Centre, 188 Lockhart Road, Wanchai, Hong Kong (852) 2219 0111 Fax: (852) 2219 0112 www.SportsBettingAsiaCongress.com info@BeaconEvents.com

August

Australasian Gaming Expo Date: Venue:

8th – 10 th Sydney Convention and Exhibition Centre, Darling Harbour, NSW Australia Organiser: Gaming Technologies Association (GTA) Address: Level 34, 50 Bridge Street, Sydney, NSW 2000 Australia Tel: (612) 82160931 Fax: (612) 82160701 Website: www.austgamingexpo.com E-mail: info@gamingta.com

Asia Adult Expo 2010 Date: Venue: Organiser: Address: Tel: Website: E-mail:

20 th – 22nd The Venetian Macao-Resort-Hotel Vertical Expo Services Co. Ltd Room 1101,193 Lockhart Road, Wanchai, HK (852) 2528 0062 Fax: (852) 2528 0072 www.asiaadultexpo.com aae@verticalexpo.com

If you know of an event to be held in Macau that you believe should be listed with Macau Business, JUNE 2010 editor@macaubusiness.com . In the subject bar, type in “List me as an event”. please drop us an e-mail:

JUNE 2010

Property

Ups and Downs Buying and selling in Macau’s property market has dropped slightly but the average value of a homes continues to rise despite the cooling market sentiment in neighbouring cities

Photo: Luís Almoster | MSPagency.org

BY ALAN TSO

he number of residential properties bought and sold in Macau slowed in the first three months of this year compared with the previous quarter, as more and more local homebuyers adopt a wait-and-see attitude in the wake of the government’s pledge to tame escalating home prices – in line with the trend in neighbouring Hong Kong and mainland China. According to the latest official data, a total of 3,884 homes worth MOP7.94 billion were sold between January and March of 2010, down by 14.6 percent and 10 percent respectively quarter-toquarter.

Shrinking sales Despite shrinking sales, however, the average transaction price of residential JUNE 2010

properties in the first three months of 2010 rose to MOP26,845 per square metre, up by 4.7 percent quarter-to-quarter and nearly 57 percent compared with the same period last year. This is already the fourth quarter in a row that has seen the average home value go up, setting an all time high. The NAPE and Praia Grande district remains the most prestigious address in Macau, with the average transaction price standing at MOP59,793 per square metre – more than double the general average.

ing measures, which include tightening of housing loans and increasing land supply. Official data reveals that a total of 1,363 homes worth MOP3.92 billion were sold under Intermediate Transfer of Title in the first quarter of 2010, up by 16.7 percent and 10.8 percent respectively compared with the previous quarter. The average value of homes sold under Intermediate Transfer of Title stood at MOP44,865 per square metre in the first three months of 2010.

Cooling off

Growth revised down

Meanwhile, the statistics reveal that the sales of new buildings and off-the-plan properties appear to be unaffected by the looming spectre of government cool-

Looking ahead, industry analysts have revised down the growth forecast of Macau’s property market for this year by 5-10 percent as a result of the govern-

55 Value of residential units sold as per record of stamp duty:

Residential units sold as per record of stamp duty*: NUMBER OF TRANSACTIONS

YEAR

MONTH

2009

January

VALUE (10^6 MOP)

YEAR

MONTH

2009

January

172

February

235

February

372

March

394

March

594

April

580

April

May

775

May

1,156

June

922

June

1,627

July

1,339

July

2,767

August

1,730

976

August

2010

299

980

September

1,366

September

3,161

October

1,185

October

2,130

November

1,360

November

2,643

December

2,003

December

4,057

January

1,297

February March

January

3,140

1,084

February

1,995

1,503

March

2,806

2010

Source: DSEC

* Note: Data include transactions of residential units valued below three million patacas, which are exempt from the payment of stamp duty according to a new government scheme.

Graph 1 Average transaction value of residential properties Value (10^3 MOP)

3000 2500 2000 1500 1000 500 0

Jan

Feb

Mar

Apr

May

Jun Jul 2009

Aug

Sep

Oct

Nov

Dec

Jan

Feb 2010

Feb

Graph 2 Average transaction price of residential units per m2 Value (MOP) 3000 2500 2000 1500 1000 500 0

mentâ&#x20AC;&#x2122;s efforts to make homes more affordable for the middle class. Many believe the market will experience mild or even flat growth in the coming months. An important indicator for the direction of the mass residential property market will be the price of a government subsidised estate, which will be launched for sale in the coming weeks â&#x20AC;&#x201C; the first such sale since 2005. Needless to say, the price of government-subsidised homes will have a benchmark effect on the price of mass market properties. And both homebuyers and developers are waiting nervously for the authorities to announce the price tag of the estate.

Q3 2007

Graph 3. Proportion of buyers:

10% 90%

Non-Residents

Residents

Graph 4. Proportion of buyers:

25% 75%

Non-Residents

Q3 2008

Residents

2009

Q1 2010

Total number of buyers in residential transactions in the first quarter of 2010:

3,648 Total value of residential transactions in the first quarter of 2010:

7,942 JUNE 2010

(10^6 MOP)

Property

Closed doors Official bodies to monitor government moves have been branded unsatisfactory

Photo: LuĂs Almoster | MSPagency.org

BY KAHON CHAN

JUNE 2010

57 ommittees to monitor land concessions and other areas of government policy aren’t working, critics say. Lawmaker Ng Kuok Cheong, a member of the Monitoring Committee for Public Finance Affairs, said two meetings took place before and after Chinese New Year, after which President Chan Chak Mo decided to suspend them in order to focus on the tobacco control law. The committee agreed to study budget implementation for the fiscal year of 2009 as its first mission, but no date was scheduled for the next meeting and Ng sent a letter to Chan looking for a complete set of rules to be established before starting any work. He attached the ‘Monitoring Committee for Public Lands and Concessions Affairs’ rules as a reference for Chan.

Even less progress The Monitoring Committee for Public Administration Affairs has made even less progress, having not met in the past seven months. President of the committee Cheang Chi Keong tried to explain the lack of meetings. “Monitoring is ... How to explain it? ... A task without any constraints of time, while law proposals, such as social security, are temporary and we are still chasing it”. Asked if he would start working on other public administration problems after the conclusion of debate on the social security law proposal, Cheang said that it would depend on whether there is another law proposal waiting in the wings.

Unsatisfactory Although the Monitoring Committee for Public Lands and Concessions Affairs began its work early, with the

first meeting with the Secretary taking place early May, member Au Kam San believes that the answers given by the government were “certainly not satisfactory”. “For example, one lot on Cotai was surrounded by wood panels bearing the Wynn logo. “The head of the Land, Public Works and Transport Bureau [DSOOPT], Jaime Roberto Carion, said the plot had not been promised or guaranteed to Wynn through concession, but remained silent when I told him to remove the panels in an equal manner to the way the occupants of land in Coloane had been treated. “The Secretary for Transport and Public Works Lao Si Io told us then that words like ‘promise’ or ‘concession’ were very sensitive and none were suitable to describe the procedure undertaken by the government pertaining to Wynn’s Cotai lot.”

What’s happening? Kwan Tsui Hang, the committee’s president, was equally unhappy when Lau merely enumerated all the concessions that had already been previously published in the Official Bulletin, as the committee hoped to know more about what was happening with lots already fenced in on Cotai. Since a meeting report is not mandatory, Au says that the monitoring committee’s work is, in a way, “a show”, but he hoped that it might come to reveal more hidden information. “Based on Lau’s poor performance at the meeting, I understood why it was better to keep it a closed door affair. But since civil servants are responsible for publishing information, they ought to prepare more data and allow the sessions to be open to the press,” he adds. JUNE 2010

Property

Cupboard is bare Home loan fund dries up early on heated-up property market MOP700 million fund to help families pay their mortgages has run out four months before it was expected to. The alarm was raised by legislator Chan Meng Kam, who has called for early government action to minimise the housing problems.

“Although in recent years there’s been rapid economic growth, the truth is that this has also driven up the prices and the rents of housing units. “Real estate prices, even those of low quality ones, not to mention the medium and high quality ones, are now at a level

far above the means of residents, especially most of the young people,” the legislator says.

June deadline Up to March 12 this year, 2,923 applications - of which 62 percent were from people aged between 25 and 34 - had been accepted under the Private Housing Purchase Loan Interest Subsidizing Scheme, which was created in June last year and should have allotted benefits to the applicants until this month this year. Housing Institute director, Tam Kuong Man, acknowledged the money intended for the regime has already been used, but points out that there are studies underway to create a development strategy for public housing for the 2010-2020 period. Chan believes that public policies dealing with this matter “have always been less than desirable” and says the Plan for House Renting to Newlyweds started with a roar and is ending with a whimper.

Miss-match

Arbitration centre for property management The government is finishing the details to create an arbitration centre for property management disputes. The president of the Housing Bureau, Tam Kuong Man, said that, after two public consultations on the subject in 2007 and 2008, a proposal has been drafted which is currently being perfected. Tam believes that the proposal may be sent for approval soon. Meanwhile, the Housing Bureau is also preparing a regime to regulate property management activities and the work of property security guards, he added.

JUNE 2010

“There is a serious mismatch between supply and demand, public housing construction projects are delayed continuously and there’s a lack of commitment to control the property market,” says the legislator. Chan also questions whether studies to assess the actual housing needs of young people of marriage age and their real need to buy a house at market price, are both being conducted. However, his questions remained unanswered. Tam argues that the government has made the effort to monitor the quality and quantity of building construction. One problem is the shortage of manpower, he says.

How could we celebrate without you?

Thanks a million!

JUNE 2010

Property

Stalled plans A long-awaited plan to re-develop the Iao Hon district is still on the drawing board – 10 years after it was first mooted n 2005, the government announced plans for the demolition and transformation of the Iao Hon area, but legislator Ng Kuok Cheong has accused the body responsible for the project - the Executive Council for the Re-organisation of the Older Neighbourhoods - of inaction. However, Ng gives one ironic exception to the bureaucratic impasse. “It decided and acted quickly when it came to demolishing a public housing building for the construction of its headquarters, which, besides being quite incomprehensible, can only be considered a great piece of satire,” Ng says.

Policy change He claims the government has backed away from a policy of exchanging housing for housing and has “become solely dedicated to promoting the concept of unit

JUNE 2010

value, that is, trying to guide the residents who want to continue living in the same area to receive compensation calculated in units of value, and with that money paying the real estate promoters the first instalment on the new buildings”. Ng even accuses the council of transforming their policy of redevelopment of old neighbourhoods “into a real estate project, which creates conflicts among the residents affected and the government”. Jaime Carion, director of the Land, Public Works and Transport Bureau, refutes the allegations and insists that work on the legal regime “has been moving on in a dynamic fashion and as planned”. Carion says that this year the new law proposal will be available for assessment.

Working groups Three working groups have been set up

to address the issue and will gather public opinion. “The development of an urban plan in line with the overall development of society and the concrete situation of the neighbourhoods is also a vital factor in order to begin an unhindered redevelopment of the old districts,” the director said. It is not yet known whether or not Iao Hon will be demolished. Carion says there will be a provisional registry at the area’s housing complexes to make the residents acquainted of future urban planning. But no dates have been given. Trading a housing unit for another housing unit involves a “complexity” that “inevitably causes disputes in terms of differences in direction, the landscape, the value of the surrounding environment and public facilities between the original fraction and the one to switch to,” Carion explained.

JUNE 2010

Property

Photo: LuĂs Almoster | MSPagency.org

Call on land Low premiums on city land concessions have stoked controversy over the profits they make for developers, but the government official responsible, Jaime Carion, has come to the defence of the formula used to calculate them BY KAHON CHAN

63 he way land premiums are calculated is not in need of change, says the director of the Land, Public Works and Transport Bureau (DSSOPT) Jaime Carion. The top official argues that the way they are calculated is fine despite the criteria for assessing the valuation of the properties not being updated since 2007. Carion also reveals that a request to revise urban planning was the reason for the delay in the development of two plots auctioned in Fai Chi Kei, and promises that the government will not consider similar requests in the future. The DSSOPT Director also described the process of public tender as “slow” when asked to explain why one wasn’t opened for the technical drawings for the urban planning projects

Controversy The recently published land concessions for The Praia real estate venture, an apartment complex project by the Sociedade de Turismo e Diversões de Macau (STDM) along Avenida Comercial de Macau - a two-story house built by a company owned by legislator Angela Leong - and a commercial building in Avenida de Almeida Ribeiro, have raised enormous controversy on Internet forums, mainly because of the low premiums at the properties were awarded. Carion says the recently-published concessions were merely changes to “old concessions” and that the house on Estrada de Cacilhas had just undergone a “renewal” by adding an expansion to the habitable area. He also explains and defends the way premiums are calculated. “The values vary for each street and there is an inspector to revaluate them continuously. The values will also be adjusted as needed, so there’s no need to revise the equation. An adjustment is only required when the environment of a neighbourhood, such as Barra, improves and the property is then worth more,” he says.

Confusion The “method for determining the concession premium” is defined by the Administrative Regulation No. 16/2004, and while the general formula involves a confusing mix of factors, a deciding key factor is the valuation per square metre. Up to the present date, the value was revised only once, in 2007, through the Chief Executive Order No. 267/2007,

since the regulation was published in the Official Bulletin on May 2. Moreover, it was determined that “the tables and listings are not [...] applicable to ongoing proceedings whose previous study or architectural project concerning the use of the land has been approved before this order was in effect”. In the case of The Praia, the valuation for the residential space was set at between MOP4,700 and MOP5,600 per square metre, or MOP436 to MOP520 per square foot, according to figures published in 2004. The Praia was sold at an average MOP2,300 per square metre in late 2006 during its first public sale. The valuation for the same lot rose to between MOP8,500 and MOP11,000 per square metre in the 2007 assessment, but there has also been an increase in the cost of construction, so some of the inflated value should be discounted. Many other factors affecting the outcome must be taken into account, besides the valuation and the cost of construction inspected by the government. The value of the premium of the land concession for the STDM venture located in Avenida Comercial de Macau (MOP25,742,504) and for the commercial building in Almeida Ribeiro (MOP2,692,598), whose contracts were published on May 26, were based on inflated values established in 2007. But they are still considered too low. The DSSOPT said that the equation would be regularly evaluated so as to meet market changes.

No more Praia-like delays The Praia’s developer has been criticised for failing to pay for the two auctioned lots located in Fai Chi Kei on the Macau Peninsula, after making a down payment of 10 percent, while the lots remain untouched. Carion reveals that the delay has been caused by the developer’s request for a review of the urban planning, so as to unite the two lots, eliminating the road that separates them. The DSSOPT conducted an extended analysis before refusing the request recently, and Carion promised that this would be the last episode of this nature. “We will conclude the proceedings and make an announcement soon and then the construction plans must be submitted. We will not waste time from JUNE 2010

Property ers of two lots at Fai Chi Kei sold in 2008 because “there was no timeframe given”. Legislators at the Legislative Assembly had proposed a resumption of land from developers for public housing before the DSSOPT presented explanations.

No time to waste

Another public land auction will be launched in the near future with restrictions to the sizes of the apartments this point forward and [the developer] should comply with the project as it was [planned]. We are going, from now on, to refuse such requests from the outset without further analysis,” Carion says. Another public land auction will be launched in the near future with restric-

JUNE 2010

tions to the sizes of the apartments and Carion has agreed to study whether it would be viable to ask the buyer to make all payments within a limited timeframe. He also admits that “it has been difficult” collecting payments, as the cost of the land has not been settled by the buy-

On the consulting contract for the urban planning area of Barra, Carion reiterates that both the public and other government departments, including the Traffic Affairs Bureau and the Cultural Institute, had not been notified in advance because there wasn’t yet a concrete proposal on which they could express an opinion. He says that the experience and ability of the consultants was estimated before awarding the contract, and if a public tender is applied to urban design contracts, “a lot of time will be wasted”. Carion also refused to give a value when asked how much the government would pay to compensate the developer for the loss of height in the skyscraper being built at the Monte da Guia. Construction was cancelled due to a last minute request on the height limit.

BUSINESS&INDUSTRY

SLOT MACHINES

A bright future? Despite its huge potential, the contribution of Macauâ&#x20AC;&#x2122;s slot-machine market to the cityâ&#x20AC;&#x2122;s overall gaming revenues remains small. However, the slot sector has grown quickly in recent years, bringing good news for suppliers. But with this success, comes increased competition. JUNE 2010

HOT ISSUES

NUMBERS

14,503

Number of slot-machines in Macau at the end of the first quarter of 2010, a four-fold increase from the 3,421 slots registered at the end of 2005.

1.95 BILLION

Gross revenue, in patacas, from slot-machines in Macau during the first quarter of 2010. This represents a year-on-year increase of 27 percent. The annual gross revenue from slots has increased every year since 2005.

4.76

Weight, in percentage, of slot-machine gross revenue in casinos’ overall gross revenue in Macau during the first quarter of 2010. The equivalent figure for the whole of 2009 was 5.45 percent.

Number of slot-machines for every gaming table in Macau at the end of the first quarter of 2010. At the end of 2005, the equivalent figure was 2.5.

3,700

Estimated number of slotmachines that Galaxy Macau (1,500) and Sands China’s parcels 5 and 6 projects (2,200) will bring to the local market. JUNE 2010

Rule changes M

acau will soon get its first set of formal rules on slot-machines, the Gaming Inspection and Coordination Bureau (DICJ) has told Macau Business. The DICJ’s director, Manuel Joaquim das Neves, says a draft by-law to regulate slotmachines has been finalised by the bureau’s legal advisors and is now being scruntised by other government bureaus before being sent to the Executive Council for final approval. By-laws don’t need to be approved by the Legislative Assembly and Neves expects it to be enacted this year. In recent years slot machine suppliers in the local market have complained about the lack of specific legislation in covering this area. There have also been high-profile cases of players accusing slot-machines of not “paying out” enough, among other problems. However, no big changes will be introduced by the new by-law. The DICJ’s director says that the new rules will only put down in black and white existing industry practices in Macau. “They are very technical rules but, overall, there won’t be any significant changes – things will only be made clearer,” Neves says. For instance, the by-law will set an interval regarding slot ratio payouts (RTP) “within what are the international practices,” says Neves. The DICJ reported that RTP in Macau in 2008 was

around 90 percent, despite there being no minimum set by the government at present. Slot-machine certification will also be one of the topics covered by the by-law. The government won’t set up any official certification centre – the current model based on certification by independent external testing laboratories will continue. At present, the process of approval of slot machines for the Macau market is governed by an instruction issued by the DICJ in 2004. Although mostly technical, the draft by-law also covers some issues regarded as more “political”. As promised by the government, it will clearly state that slot-machine establishments won’t be allowed close to residential areas. Public workers will still not be allowed to gamble, not even in slot machines parlours, something that was possible in the past but that has meanwhile become illegal.

DOS AND DON’TS TRACK THE TRENDS: Unlike gaming tables, slot-machines are constantly changing with suppliers obliged to track down the next ‘’big thing”. Keeping up-to-date is an essential survival tool. IMPROVE COMMUNICATION: For data mining, slot-machines suppliers need to rely heavily on their clients, namely gaming operators. Maintaining good cooperation between both parties can translate into a win-win situation. “LOYALTY LOCKS”: Schemes that “tie” customers to a particular slot-machine or group of slotmachines can become a powerful yet loyal revenue tool for casinos. This is the case with reward cards. Slot manufactures should cater for this. CLEAR INFORMATION: It is essential that all information regarding each slot-machine, game and promotion is clearly available to players – a role that is shared both by the slot supplier and the casino operator. Complaints over this issue have already made the headlines in Macau.

Although it is expanding at a fast rate, the slotmachine sector in Macau still remains quite a niche. By contrast, in Las Vegas, the percentage of gross gaming revenue from slot-machines is around 65-75 percent. This situation may hold-up the introduction of new products into Macau or, at least and most probably, delay eventual culturally adapted games and technologies made specifically for Chinese players. Note, however, that the local infrastructure is upto-date because most local casinos are relatively new.

Unlike gaming tables, slot-machine suppliers need to bear high research and development costs associated with keeping up with technology. This has become clear with the growing demand for slots which provide more advanced, networked, interactive and centrally managed server-based games. But suppliers are not only spending money on R&D to have better games and technology. Issues that previously were not a priority, like the slot-machine’s external design or ergonomics, are now being carefully examined.

In casinos, there is more to green than the colour of money or the cloth of gaming tables. Worldwide, slot-machines suppliers are looking into providing what has already been labelled as “greener slot floors”. Since slots run 24 hours a day, seven days a week, they consume significant amounts of electricity. Several manufacturers are preparing to push into the market eco-friendlier products. The goal is to have slot-machines that run on half the energy they need today by 2015.

Responsible gaming is still something new to Macau, which has no special rules on the issue. Although gaming tables are the main attraction in the local market, slotmachines pose a higher risk for addiction, according to several international studies. Some slotmachine suppliers are looking to new approaches to set responsible gambling limits, while also allowing players to access information about their wins and losses or even self-exclude right at the slot. The objective is to use the technology on the machine to provide responsible gaming assistance.

HOW THEY DO IT

The only substitute With the government’s decision to cap the number of gaming tables in Macau at 5,500 until 2013 – there were a total of 4,811 at the end of March 2010 – new opportunities have been created for slot-machine suppliers. Gaming operators now only have free room to increase the number of slot-machines which are the only substitute available in the market. Sands China was the first company to understand this and to adapt its expansion strategy to the new scenario. The Las Vegas Sands subsidiary for the Macau market

announced last month that it will reduce the number of gaming tables it originally expected to deploy in parcels 5 and 6 in Cotai from the original 670 to 400, due to government demands. However, besides relocating 170 of its existing tables to lots 5 and 6, the company will also add 100 electronic gaming tables, technically classified as slot-machines. Slots have one other advantage over gaming tables: since they demand much less human power, they are cheaper to operate. The unsolved question is how to make players migrate to them. JUNE 2010

NEED TO KNOW

TAXES

A direct government tax of 35 percent is levied on slot-machine gross revenue plus indirect taxes of four percent for social and promotional purposes the same taxes also apply to gaming tables. However, the annual premium charged by the government to gaming operators is much lower for slotmachines in comparison with gaming tables. Casinos need to pay a fee of MOP1,000 per slot, while the premium per mass market gaming table and per VIP table is set at MOP150,000 and MOP300,000, respectively.

GAMES

At the bottom end, games are the major decision-makers on how successful a particular slot-machine supplier is. However, it is hard to say what makes for a popular slot game. There are many factors affecting the final outcome like rich content, familiar game symbols, entertaining themes and graphics. Then, there is also the cultural factor: multi-terminal gaming machines that assimilate locally popular games like baccarat, Sic Bo and roulette have proven in the past to be quite popular in Macau. According to some casino slot floor managers, Chinese gamblers are also less interested in free game bonuses and more turned on by jackpots. An unanswered question is whether all the games should be translated into Chinese: some operators stress this is important, other say it really doesnâ&#x20AC;&#x2122;t make a big difference, although there should be basic information in Chinese, namely the buttons and instructions.

DIGITAL SIGNAGE

With so many lights blinking on a casino floor, digital signage is vital for capturing a playerâ&#x20AC;&#x2122;s attention. The goal is to help casinos to pass promotional messages directly to slot players and also to encourage a higher level of interactive response. Basically, digital signage boils down to getting an electric message to a display somewhere on the casino floor. New technologies have introduced a higher level of flexibility to it, providing for tailor-made casino marketing messages for each individual. Some systems even offer the ability to target promotions to individual customers based on their preferences (using data collected by the player card) and encourage customer interaction (like ordering food or making restaurant reservations). The final goal is to make the casino experience more pleasant for the customers, while also getting them to play longer and return in the near future.

JUNE 2010

SERVER-BASED GAMING

Server-based gaming (SBG) is a new trend in the slot sector. Electronic games are downloaded from the operatorâ&#x20AC;&#x2122;s backend content management system over a highspeed network to the slot-machines on the casino floor. This allows gaming operators to significantly minimize the time slot-machines are not available to players since it eliminates manual intervention requirements for updating or changing games. This translates into lower operational costs. SBG has other selling points: management software can provide useful data to gaming operators like what games are being played, and provide analytics to maximize game revenue. The big change is that, besides allowing for better data mining, SBG also allows for a faster response to market demand: new games and game payouts can be programmed in just a click of a mouse. The combination of increased operational efficiency and better analytics, gives casino operators freedom to experiment and try new genres of interactive game content to drive electronic gaming machine revenue.

EXPERT VIEW

Bally high Slots are very much a niche market in Macau but one of the world’s most experienced suppliers of the money-eating machines believes there is room for growth by Luciana Leitão

acau’s slot machine market remains relatively small, and given the unique characteristics of Chinese players, it could be difficult for it to grow at the same rate as Las Vegas. Cath Burns, vice-president of Asia Pacific and managing director of the MSAR office for slot specialists Bally Technologies, talked to Macau Business during the Asia Pacific Systems User Conference 4, and outlined the challenges ahead and current developments in the company. US-based Bally sells slot machines as well as casino management systems, and from its Asia Pacific headquarters in Macau, it provides casino management systems for Galaxy and SJM, as well as selling slot machines to all the operators. At present, there are 4,484 Bally Technologies slots in Macau, accounting for 31 percent of the total. Invasion of the machines Burns believes even though the market is small, there will eventually be a more balanced equilibrium between the slot and table game markets. “If you look at Las Vegas, when it started, it was a table market; it had no slot machines,” recalls the managing director, adding: “The slot machines

invaded and now they’re dominant.” Therefore, even though revenues from slots remain very small in Macau, the situation is slowly reversing, although perhaps not at the same rate as in Vegas. One thing is certain: both the slot and table game markets are different here due to the characteristics of the Chinese players. “I’m not sure we’ll ever see a reversal like we saw in Las Vegas, because the love of baccarat is a fairly unique trait of the Chinese player,” Burns explains. There are about 14,500 slot machines in Macau, whereas the biggest casino in the USA has 10,000. The challenges Given the current size of the slot machine market in Macau, the challenges are many. “We have to keep listening to customers and understanding their requirements; in a dynamic market like Macau that moves very quickly, we have to keep up,” says Burns. Nevertheless, Chinese gamblers are getting more and more demanding, wanting more and more things from slot machines. As a result, Bally Technologies is trying to develop new products to keep up with tastes.

Burns outlines one such innovation: “We’ve now got a beverage service, a hostess can come around with tea to give to you. “This is just an example of a feature that goes with this new machine. You can also watch live football on it.” Extending operations Bally Technologies’ Asia Pacific headquarters is looking not only to the MSAR market, but further afield to South Korea, Cambodia, the Philippines and Singapore. With four-and-a-half years in Macau, Burns is happy with the developments in the city and expects growth. The Asia Pacific region is now doing “pretty well, fuelled by the growth in China”, she says. Mainland caution Burns is more cautious on the mainland market. “Our interest is in the legal Macau market; we only operate in legal government regulated markets,” she says. The same logic applies to online gaming in Macau. “We won’t enter it, because it’s prohibited and it’s prohibited almost on a global basis.” Although she recognises online gaming is a very big and successful market, she declares: “Until it can be regulated to a standard that meets an acceptable industry standard, it’s just not a market space that we’ll look at.” Bally Technologies organises the annual Asia Pacific System Users Conference, to show “customers and potential customers any new system products and innovations and to get feedback on what can be done better with the products”. JUNE 2010

INTERVIEW

March of the machines LEISURE SEEKERS, NOT SERIOUS PUNTERS WILL BECOME THE CORE SEGMENT FOR MACAU’S SLOT MACHINE FUTURE. SO PREDICTS A CONFIDENT CONSTANCE HSU, PRESIDENT OF MOCHA CLUBS WHO HAS HER EYE ON GLOBAL EXPANSION

hat has been Mocha Clubs’ business strategy since it was established in 2003? Back in 2003, most of the casinos were dominated by traditional table games, 99 percent of the gaming revenue was generated by them. There were only approximately 800 slot machines in the market and almost all were one-arm bandits. Lawrence Ho [co-chairman and CEO of Melco Crown Entertainment] saw the potential for electronic gaming and came up with the idea of Mocha Clubs and created a string of cosy and trendy slot parlours focused exclusively on electronic gaming only. We opened the first Mocha Club in September 2003 – at the very first start, we only had around 69 machines.

Was it initially hard to attract players? At that time, most of the players were table game lovers; they preferred to engage in very intense face-to-face battles against the house, believing they could influence the outcome by spotting the trends or picking up their lucky cards or numbers. We adopted a very novel approach to convince them to check out the slots, with around 70 percent of our initial machines being the electronic versions of table games, including sic bo, roulette and baccarat, and the remaining 30 percent being individual slot machines. Gradually, people were attracted to slots as they saw more and more players winning jackpots. I believe we were also the first to introduce a player tracking system into

Livin’ the Vida Mocha M

ocha Clubs is a subsidiary of Melco Crown Entertainment. The company runs eight electronic gaming machine parlours in Macau and employs a total of 700 people, including back-office personnel. The number of gaming machines in operation at the Mocha Clubs averaged approximately 1,564 in the first quarter of 2010, an increase from an average of approximately 1,273 in the first quarter of 2009. In the first three months of this year, net revenue from Mocha Clubs totalled MOP214 million, up from MOP198 million in the same period of 2009. The clubs generated MOP52 million adjusted EBITDA in the first quarter of 2010, which compares with MOP54 million in the first quarter of 2009. The net win per gaming machine per day was MOP1,496 in this period, as compared with MOP1,688 in the same period in 2009. “Our performance is above average,” says the company’s president, Constance Hsu, referring to the local slot machines market. “In 2008, we had a double-digit, year-on-year growth in business; last year, the increase was single digit. For 2010, we expect to continue to expand,” she told MB Files. “I am very positive about Mocha’s future development and about the slot machine market.” JUNE 2010

Macau and we also launched a loyalty program. With these, we were able to obtain a comprehensive understanding of the players’ preferences: what they liked and why they liked it. That enabled us to tailor-make our products. Meanwhile, did the market change? Now, it is the other way around: around 70 percent of our machines are individual slot machines and 30 percent are multi-terminals. That means that the learning curve of customers was very steep. Nowadays, about 67 percent of Mocha clients are pure slot players, they don’t play multi-terminals; about 25 percent are pure multi-terminal players; the other 8 percent will switch between both. So, it is very clear that the majority already has very strong preferences regarding their game types. How does Mocha Clubs differentiate itself from the slot machine areas of regular casinos? Mocha is successful in achieving its own goal, i.e. offering cosy and trendy slot parlours, with more privacy. We are also very service-oriented. We believe service

FEATURE

Opportunities ahead T

is the key to making clients return and to creating a bond with them. We also have a very strong brand image: when people see Mocha, a slot image comes to their mind. Finally, many of our customers are leisure and pleasure seekers who enjoy a relaxing gaming experience. Do you expect that eventually slot machines will overcome table games in terms of gross gaming revenue in Macau? The slot machine industry will continue to be vibrant. From my point of view, leisure seekers, rather than serious punters, will become the core segment in the future. Although migration of high rollers from gaming tables to slots is possible, it is not likely because they usually rely on credit, while slot machines are totally a cash market – whatever you bet is on a cash basis, not on a credit basis. Is there a need for more culturally specific products? In 2003 the market was pretty much manufacturer-oriented: they just

supplied what they wanted. Currently, things are more customer-oriented and manufacturers listen more to players and operators. So a lot of Chinese and Asian culture-related games have been launched in the past two to three years. This makes a big difference because we have different customer groups to cater to. The Macau government has said it will ban slot machines from residential areas in Macau in the near future. What do you think of that? We will cooperate with any government policy on that. In the long term, we will also look at the possibility of stretching the Mocha brand overseas. At the same time, we will continue to introduce more innovative games to our customers at existing venues. Besides Mocha, only SJM operates slot parlours in Macau. Do you expect more competition in the future? If the ban goes forward, I think the room for that will be very limited.

hey say size matters, but it isn’t everything. For US-based International Game Technology (IGT), Macau’s small but expanding slot machine market presents a number of opportunities. “Macau has a growing slots market and although currently it represents a small piece of the overall gaming revenues, IGT sees this segment of the market as an opportunity for growth,” says John Gomes, managing director of IGT Asia - Macau. Change is already underway in the territory, Gomes insists: “Games are now providing greater options and not only attracting the mass market attention, but also creating excitement throughout casino floors through the variety of game types and bonus features now available.” He also believes that Macau has a unique position in the market because VIP tables are the main revenue driver. However, Gomes adds: “If you look at the main floor business, you will see that the trend towards slots is growing in demand year-on-year and we believe that this will continue throughout the coming years.” He says it is just a matter of time as players become more accustomed to slot machines, and understand that, when playing in a regulated market, the outcome is based on random number generators built into the game’s firmware. Meanwhile, slot machine suppliers and casinos must also work closely to place slots in a strategic manner across the properties so that the result is a footprint of successfully performing games. With almost 30 years in the business, IGT established its office in Macau in 2005, soon after the casino industry started booming. The company and its affiliates hold more than 360 licenses in 290 gaming jurisdictions worldwide. JUNE 2010

OPINION

Ricardo C.S. Siu ASSOCIATE PROFESSOR OF BUSINESS ECONOMICS AT THE DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS IN THE FACULTY OF BUSINESS ADMINISTRATION AT THE UNIVERSITY OF MACAU

An attractive proposition

acau’s casino industry has gone through dramatic changes since 2002. On top of impressive revenue growth between 2003 and 2009 – a compound annual growth rate (CAGR) of nearly 27 percent – which has mainly come from gaming tables, the contribution of slot-machines should not be overlooked. Despite their small market share, slots accounted for 5.5 percent of the industry’s gross revenue in 2009, and the growth in the number of machines and gross revenue in this segment are ahead of the industry’s overall average. For example, the number of slotmachines increased more than 60 percent, while the same rate for gaming tables was close to 50 percent. Gross revenue from slots showed a CAGR of over 70 percent between 2003 and 2009. Many advantages Slot-machines have many advantages which not only make them a dominant segment in most of the casino jurisdictions in the world - over 60 percent of Las Vegas’ gross gaming revenue is derived from them - but also makes them an essential component of JUNE 2010

Macau’s bid to diversify the traditional gaming model. Internationally, the profitability of slotmachines is on average higher than that of gaming tables. Firstly, they allow casinos to save a considerable amount on labour, which accounts for the largest part of a casino’s operating costs. In any one modern service sector where labour costs are high, expanding the slice of slot-machines is always a desirable tactic to secure profit margins, and this is becoming increasingly the case in Macau. Efficiency Secondly, compared with gaming tables, slot machines offer higher house edge and also higher speed of playing. In other words, they are efficient. For example, instead of telling players about the abstract concept of “house edge’’ a casino can display: “Our machines play out 95 percent!” which has an obvious appeal. This means that the casino is making a 5 percent house edge as compared with around 1.45 on baccarat, or around 2.9 percent from dead-chip play in Macau’s case.

Variety Thirdly, from a casino tourism point of view, slots offer a variety of game types and better entertaining graphics and sound effects for the casual customer. Also, the MOP1 or MOP5 per-play machines are quite attractive to tourists who are unfamiliar with, and do not bother to read through, the rules of the various casino games. Big potential All this shows how slot-machines can work to help Macau’s development into a worldclass leisure centre offering high, value-added gaming services. But growth may be hampered. As the table game market is heavily dependent on the VIP sector, the huge volume of business turnover may override the momentum of the existing casinos to re-set focus to develop slot-machines. Also, the obvious dominance of Chinese players means slot-machines will quite likely be regarded as a “complementary” rather than dominating segment. It is clear that slot-machines are more essential to the diversification of Macau’s gaming industry than their contribution in absolute terms to the industry’s gross revenue.

JUNE 2010

Gaming

The billions race uperlatives run out as casinos smash yet another record Macau’s casinos pulled in a staggering US$2.125 billion last month - just short of 100 percent more than in the same month last year. Data gathered by Lusa agency from Macau’s gaming operators, indicates that May ended with gross revenues of just over MOP17 billion (US$2.125 billion), an almost 95 percent year-on-year increase. Not only that, May also broke daily revenue records. The enormous figures mean that Macau casinos have pocketed more than MOP72.2 billion (US$9.025 billion) in the first five months of the year, a 70 percent increase compared to the same period last year. Apart from the monthly record, May’s gross revenue is nearly identical to the MOP18 billion earned during the whole of 1997, the most profitable year the Portuguese administration, that ended in 1999, ever had. Last month, Stanley Ho Hung Sun’s Sociedade de Turismo e Diversoes de Macau kept first place in the operator rankings with just over 32 percent of market share, followed by Sheldon Adelson’s Sands China which had just under 20 percent and by Wynn Resorts with nearly 16 percent of the market. Melco/PBL, a joint-venture which includes Lawrence Ho, Stanley Ho’s son, as one of its main shareholders, took fourth place with almost 14 percent, followed by Galaxy Resorts with a little more than 11 percent and by MGM Macau, a partnership between the North-Americans and Pansy Ho Chui King, daughter of Stanley Ho, which closes the list with over seven percent market share. By the end of March, Macau had 33 casinos, 4,811 tables and 14,503 slot machines. Expert analysis of the evolution of casino revenues in Macau during the first five months of 2010 leads experts to forecast a minimum growth of 40 percent for the year, representing an annual revenue of MOP168 billion (US$21 billion).

Gaming Results: Gross Revenue

In Million MOP (1HKD:1.03MOP)

17,000*

18,000 16,000

13,937

14,000

12,600 11,268

12,000 10,000

8,799

8,000

9,570

12,215

13,400

13,569

Feb 10

Mar 10

14,100

11,347

10,943

8,269

6,000 4,000 2,000 0

May 09

Jun 09

Jul 09

Aug 09

Sep 09

Oct 09

Nov 09

Dec 09

Jan 10

Apr 10

May 10

* Estimated JUNE 2010

Gaming Results: Market Share Per Operator 2010

2009

May

Jun

July

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

SJM

31%

30%

23%

26%

31%

32%

31%

30%

32%

34%

33%

32%

Sands China

21%

26%

22%

24%

20%

24%

21%

22%

20%

21%

20%

Galaxy

12%

10%

12%

13%

10%

11%

Wynn

18%

14%

15%

13%

14%

12%

17%

13%

15%

13%

14%

16%

Melco/PBL

10%

18%

16%

17%

13%

12%

16%

14%

13%

14%

MGM

12%

11%

TOTAL

100%

SJM

Sands China

Galaxy

Wynn

Melco/PBL

MGM

30 20 10 0

May 09

Jun 09

Jul 09

Aug 09

Sep 09

Oct 09

Nov 09

Dec 09

Jan 10

Feb 10

Mar 10

Apr 10

May 10

* Estimated

Wynn Resorts disputes IPO claims Wynn Resorts Ltd is disputing an investment company’s claim in a Las Vegas court that it is owed US$32 million for participating in Wynn Macau’s Initial Public Offering (IPO), Las Vegas Sun reported. Wynn says AtlanticPacific Capital Inc, from Connecticut, was hired by the company, but for other purposes and was not involved in the IPO at all, which raised US$1.6 billion. “AtlanticPacific never presented Wynn Resorts with any investors and/or capital for Wynn Macau Ltd,” Wynn Resorts says in the lawsuit. AtlanticPacific demands to be paid 2 percent or US$32 million of the capital raised by the IPO, according to Wynn Resorts.

Government boosts gaming estimates The Macau government has revised its estimations for the direct gaming tax revenue for 2010. The government now expects to raise MOP40.25 billion from gaming tax revenue – an increase of 19 percent over the previous projections. The revision is included in the latest amendments of the Fiscal Year 2010 Budget, which were announced last month. However, the revised figure is still below last year’s gaming tax revenue of MOP41.87 billion. In the first quarter of 2010, direct taxes from gaming totalled MOP14 billion, provisional data from the Finance Services Bureau shows – these taxes are related to gaming revenues from December to February. In the first quarter of 2010, Macau casinos raked in MOP40.95 billion, a year-on-year increase of 57.4 percent, according to official figures released by the Gaming Inspection and Coordination Bureau. The Macau government estimations regarding direct gaming tax revenue are known to be historically very conservative. Macau’s revised budget will also include provisions for the cash handout scheme and stamp duty waiver on admission tickets of performances, exhibitions or entertainment projects this year. The revised budget sets total revenue for 2010 at MOP58.87 billion from the previous MOP52.42 billion.

JUNE 2010

Gaming

Tweaking it

Almost a decade after it was enacted, Macau’s Gaming Law is to get its first makeover. However the changes will be minor and will only cover casino access BY EMANUEL GRAÇA

fficials will soon present a proposal for the revision of the Gaming Industry Regulatory Framework law (Law 16/2001), but don’t get excited. The not so lofty goal is to increase the minimum age for entering casinos from 18 to 21. There will be other changes, but only on casino access. A draft law revision has already been put together by the Gaming Inspection and Coordination Bureau’s (DICJ) legal advisors and is now being analysed by other government bodies before being sent to the Executive Council. Then the Legislative Assembly will have a look. There is no expected timeline for its final approval. According to sources, the government first tried to introduce the changes using a by-law, which doesn’t need to be approved by lawmakers. However, their

JUNE 2010

legal experts advised against this. Law 16/2001, enacted in September 2001, is the main piece of legislation governing casino activities in the territory - it is commonly known as the Gaming Law.

Access blocked According to the DICJ’s director, Manuel Joaquim das Neves, the proposed law revision will only cover casino access restrictions. One of the main changes proposed is the increase of the minimum age for entering casinos from 18 to 21. This was a pledge made by the previous government and reiterated by the current Chief Executive, Fernando Chui Sai On. The revision will also cover issues like the preventive interdiction of players entering casinos – a topic already mentioned in the Gaming Law but which has raised doubts among legal

experts – and the existence of lists of excluded/self-excluded players, Neves told Macau Business. The DICJ’s director explained there will be an adaptation period in order not to affect the employment rights of croupiers currently under 21. It will also be possible for fire fighters, police officers and health care staff to go inside casinos in emergency situations.

What if? The draft law revision will even cover what happens if someone under 21 plays in a casino and wins. This comes after a 16-year old girl entered a casino during the Lunar New Year of 2007, and won a slot-machine jackpot of HK$740,000. Although the Gaming Law states clearly that minors cannot access gaming venues, there was heated discussion

77 the government finally dropping the proposal. Meanwhile, the government has not given any estimates on the possible impact on gaming revenues from the under 21 rule.

No tax changes

on whether those under 18 could still play and win money, even if they were in the casino illegally. Eventually, the DICJ decided that the jackpot should be given to the minor’s mother, who was with the girl when she won the prize. The age proposal is an attempt to give youngsters more time to get an education before they go to or work in a casino. Some analysts, including the former Legislative Assembly president Susana Chou, have criticised the move, noting that people reach the legal adult age in Macau at 18 years of age, being considered able from then onwards to drive a car or cast a vote. The previous government had tried to lower the age of criminal responsibility to 14 for several crimes. However, the move was eventually blocked by opposition in the Legislative Assembly, with

For casino operators, the Gaming Law revision is a lost opportunity to push forward a break in gaming taxes. At present, casinos need to pay a direct tax of 35 percent on gross gaming revenues. The law also states they are obliged to pay a further two contributions of up to 2 percent for “cultural, social, economic, educative, scientific, academic or philanthropic actions” through the Macau Foundation and up to 3 percent for “urban development, tourism promotion and social security.” The maximum tax is therefore 40 percent, although it is currently set at 39. Now, gaming operators pay 1.6 percent to the Macau Foundation and 2.4 percent for “urban development, tourism promotion and social security” (1.4 percent in SJM’s case, which, in exchange, is responsible for dredging and other maritime obligations). Several gaming operators have been asking the government to consider a partial rebate in gaming taxes, to enhance competitiveness as well as to curb regional competition, namely from Singapore. For Luis Pessanha, legal adviser of the Legislative Assembly, the gaming tax burden in Macau is “comparatively high”. However, this is still not the appropriate moment to reduce it, because casino revenues are still booming, suggesting the market is healthy. According to Pessanha, it is also too early to assess Singapore’s impact on Macau’s gaming market and the eventual need for tax adjustments.

What about the rest? Gaming operators are concerned about several issues included in the Gaming Law which have been waiting for further regulation for years. According to government sources contacted by Macau Business, there are draft pieces of legislation prepared covering most of these topics, but “there is no political will to enact them”. One of the issues is casino reversions to the territory when a gaming

Sands closes financing deal Sands China has closed a US$1.75 billion project financing which will be used to complete construction on the combined Shangri-La, Traders, and Sheraton resort complex parcels 5 and 6 - in Cotai. This “represents a critical next step in Macau’s ability to both diversify its economy and further reach its potential as a full-scale leisure and business destination,” said Sands China chairman Sheldon Adelson. “The additional 6,000 hotel rooms are especially important in growing the meeting and convention business in Macau. The additional capacity will open up a new and larger base of potential customers who, because of the size of the events, were not previously able to bring their meetings or conventions to Macau,” he added. Adelson said he expects the first phase of the development, which will feature approximately 3,700 hotel rooms and additional retail, gaming and meeting/convention facilities, to open in the third quarter of 2011. Phase two includes a 2,300-room Sheraton hotel tower, as well as other non-gaming amenities, and is expected to open approximately six months later. Timing for the completion of a third phase, which includes plans for a St. Regis hotel and serviced-apartments, will be announced at a later date.

JUNE 2010

Gaming

concession lapses. Casino reversions aim to allow the government, by itself or through third parties, to carry on exploring such a vital activity for the local economy, even if the concessionaire quits or becomes unable to continue carrying on normal operations. However, how these reversions are to take place is still to be regulated. The Gaming Law also states that a gaming concession can be unilaterally terminated by the Government by invoking public interest. In such a situation, the casino operator has the right to “just compensation”, but there are no rules on how to set it. A simpler but even more important issue is the definition of the characteristics, limits and function-

ing of gaming areas. Currently, the Gaming Law only states that casinos are the places “authorised and classified as so” by the Government. There is no further regulation on this matter. According to the Gaming Law, the Chief Executive also has the power to authorise the exploration of casino boats or casino airplanes, and the introduction of slot-machines at the international departure area at the Macau airport. Again, no further regulation exists on these topics. Finally, legal experts say the Gaming Law needs urgent revision on the information requirements for shareholder changes. The law states that the sale of casino operators’ shares must be author-

Sands reveals MOP$1bn construction contracts Sands China says construction contracts for the initial phase of parcels 5 and 6 on the Cotai Strip have been fully executed. More than 20 contracts, valued at over MOP$1 billion, have been awarded to local Macau construction companies. Scheduled to open in the third quarter of 2011, work on 5 and 6 will resume immediately, Sands said. During the selection and award process, priority consideration was given to Macau and mainland developers to support local and regional businesses, the company said. When ready, parcels 5 and 6 should create between 8,000 and 10,000 new direct jobs and over 10,000 indirect positions, besides generate new business for local businesses.

Chen gets new contract at Wynn Wynn Resorts, through its wholly owned subsidiary Worldwide Wynn, LCC, has entered into a new employment agreement with Linda Chen, chief operating officer of Wynn Resorts (Macau) and Wynn Macau. The new agreement is effective as of February 25, 2010, and will terminate on February 24, 2020. The agreement provides for a base salary of US$1.5 million (MOP12 million) per year, which shall be subject to performance reviews and may be increased, but not decreased. Chen will also be eligible to receive a bonus as determined in accordance with Wynn Resorts Annual Performance Based Incentive Plan for Executive Officers. Under the new employment agreement, Wynn has agreed to purchase Linda Chen a home in Macau costing approximately US$5.4 million (MOP43.3 million) and to provide her the use of an automobile in Macau. JUNE 2010

ised by the government. The main issue is that most of the gaming operators in Macau – MGM Grand Paradise is the exception – are fully-owned subsidiaries of listed companies. This means that, if the parent company changes hands, the control of the gaming operator is affected, although it is still technically owned by the same shareholders. A possible solution could be copied from other jurisdictions, where concessionaries are only obliged to communicate changes in shareholding composition that may, directly or indirectly, significantly affect operations. But again, there is the need for political will.

Sands inks deal with Playboy Sands China Ltd and Playboy Enterprises, Inc have entered a licensing agreement that will bring two Playboy-inspired clubs to the Sands China properties in Macau. The first, a 12,000 square-foot Playboy Club Macao, is set to launch by the end of the year. Located at the top of Sands Macao, it will offer private entertainment and media rooms, live entertainment, private gaming rooms and high-limit gaming, as well as a lounge. The second phase of the partnership is a 30,000 square foot Playboy Mansion Macao. The fullyintegrated venue will include bars, lounges, nightclub, gaming and retail. The Playboy Mansion Macao will be located at the future Parcels 5 and 6 and is scheduled to open in the first quarter of 2012. Steve Jacobs, president & CEO, Sands China Ltd, said: “Playboy’s entrance into Macau is a welcome addition to Sands China Ltd’s offering for the region, further cementing our promise of providing Asia with unprecedented entertainment and integrated resort amenities for all ages and palates.” “The continued popularity of the Playboy brand in Asia and the expected growth of Macau combined with the proven track record of a world-class operator make this partnership with Sands China a great opportunity,” said Scott Flanders, CEO, Playboy Enterprises, Inc.

Macau shows its muscle Tiny Macau is using its perfectly formed business body to muscle its way through a period of stock market turbulence BY RAY CHAN

espite Germany and the International Monetary Fund’s bailout of the “sick man of Europe”, Greece, the euro’s fall against the US dollar has continued to record low levels. Simultaneously, the euro declined by more than 16 percent against the Chinese yuan. At the same time, global stock markets performed poorly, with many major markets hitting their lowest level as

Macau Casino Stocks Performance Year-to-date versus Heng Sang Index (Base=HK$10) HK$

23000

15 14

22000

SJM Holdings Ltd. Galaxy Entertainment Group Ltd. Wynn Macau Ltd.

12 21000 11

Sands China Ltd.

20000

Melco International Develop.

9 8

19000 Dec 09

Jan 10

Mar 10

Apr 10

Hang Seng Index

May 10

Macau Casino Stocks Performance versus HIS Year-to-Date (Base=HK$10) HK$

SJM Holdings Ltd.

Galaxy Entertainment Group Ltd.

13 12

Wynn Macau Ltd.

Sands China Ltd.

10 Melco International Develop. 9 Hang Seng Index

8 Dec 09

Jan 10

Feb 10

Mar 10

May 10

JUNE 2010

Gaming

investor sentiment remained weak amid concerns about euro-zone debt in the other PIIGS countries (Portugal, Italy, Ireland, Greece and Spain) and escalating tension between South and North Korea.

Sharp decline

Macau-based Casino Stocks Performance Year-to-Date HK$

6 5.5 5 4.5 4 3.5 3 2.5 2

Dec 09

Jan 10

SJM Holdings Ltd

Feb 10

Mar 10

Galaxy Entertainment Group Ltd

Melco International Develop.

Las Vegas Base Casino Stocks Performance Year-to-Date HK$

16 15 14 13 12 11 10 9 8

Dec 09

Jan 10

Feb 10

Wynn Macau Ltd

JUNE 2010

Mar 10

Sands China Ltd

Moving beyond Europe, the Hong Kong benchmark Hang Seng Index further corrected to a 19,000-point level with the Dow Jones Index once declining sharply to reach the 10,000-point level. The Shanghai Composite Index hit a low close at 2,600 points, even though a report cited from the Shanghai bourse indicated that the overall market liquidity had improved. Amidst all this turmoil sat little Macau, less affected by the global financial unrest. Ferries are fully booked and taxis remain as difficult to catch as ever, especially at weekends when visitors pour into the city from the Macau and Taipa ferry terminals, as well as the MacauChina land border and airport. In the first four months of this year, 8.2 million visitors entered Macau or 12.4 percent more than the same period a year before. The majority - 4.4 million and 2.4 million - came from the mainland and Hong Kong respectively, an increase of 20 and 3.2 percent respectively. Gross gaming revenue for the first quarter of 2010 significantly surged to MOP41.2 billion from MOP26 billion in the same period a year earlier, a 57 percent year-on-year increase.

Transparently good Little wonder then that SJM (880.HK), the largest casino operator by market share, reported healthy first quarter results as well as issuing the figures voluntarily and thus increasing its operational transparency. Net profit surged to HK$760 million from HK$138 million last year, a 451 percent rise. Gross gaming revenue rose by 74 percent to HK$12.7 billion. The company, owned by casino mogul Stanley Ho Hung Sun, received 65 percent of its gross gaming revenue from VIP or high-roller gamblers totalling HK$8.3 billion up from HK$4.1 billion, and mass market revenue rose to HK$4.1 billion from HK$3 billion. In May, SJM also lowered the conversion price for its HK$2 billion worth of six-year convertible bonds to

Gaming

Gaming pays People working in Macau’s gaming sector had a median monthly employment earnings of MOP13,000 during the first quarter of 2010. The figure is 44.4 percent more than the general monthly employment earnings in Macau, which stood at MOP9,000 over the same period. Median monthly employment earnings of the employed local residents amounted to MOP10,000. Distribution of the employed by industry: 23.4 percent were engaging in recreational, cultural, gaming and other services; 14.3 percent in hotels, restaurants and similar activities; 13.2 percent in wholesale and retail trade and 8.9 percent in construction.

Macau Slot gets nod Sociedade de Lotarias e Apostas Mútuas de Macau, Limitada – commonly known as Macau Slot – will have its concession for soccer and basketball betting extended. The government will sign a contract with the company to extend the concession until June 5, 2011, according to the Official Gazette. Macau Slot is principally owned by Socidedade de Turismo e Diversões de Macau, S.A.R.L. (STDM), controlled by Stanley Ho Hung Sun. Founded in 1989, it was the first government-franchised company to offer the sale of instant winning lottery tickets on passenger ferries running between Hong Kong and Macau. In 1998 - prior to the football World Cup - Slot was granted the franchise from the Macau government to offer soccer betting, thus becaming the first governmentfranchised company in Asia to operate a sports betting business. This was followed by a governmentfranchise for basketball betting on 30 December 2002. JUNE 2010

HK$5.24 per share from HK$5.35 per share, representing about a 16 percent discount on share price closing at HK$4.81, while none of the bonds have been converted into shares. On the company’s debt to equity position, it has net cash of HK$7 billion, making them the only net cash casino stocks listed on the Hong Kong Stock Exchange, according to the company’s financial statements. It is equally worthy highlighting that both the stock and casino markets hit their bottom last year due to the credit crunch, and also had to endure mainland travel restrictions.

Aggressive expansion Meanwhile, Sands China (1928.HK)

reported first quarter of 2010 net profits of US$111 million up a massive 300 percent from US$27 million a year ago, while the company’s share price was down by more than 10 percent month-on-month due to weak market sentiment. With its aggressive expansion plans, the company secured a MOP1 billion (US$125 million) financing deal to restart work on the Cotai Strip’s sites 5 and 6. The two phases are expected to cost US$2.4 billion to complete and are set to open by the third quarter of 2011.The expansion project will feature hotels such as the ShangriLa, Traders and Sheraton hotel brands.

HK-listed casino operators by market capilalization

Melco International Development SJM Holdings Ltd.

13%

Galaxy Entertainment Group Ltd. Sands China Ltd

47% Wynn Macau Ltd.

31%

HK-listed casino operators sales breakdown

Melco International Development Galaxy Entertainment Group Ltd.

Wynn Macau Ltd.

22% SJM Holdings Ltd.

Sands China Ltd

19%

53%

83 By Michael J. Munoz April 19 (Bloomberg) -- Following is a summary of Macau’s gaming revenue for the first quarter, according to figures released on the Gaming Inspection and Coordination Bureau’s Web site.

1Q 2010

4Q 2009

3Q 2009

2Q 2009

41,248 40,951 28,761 8,024 1,948 869 594 273 135 55

36,476 36,161 24,976 7,259 1,820 779 509 262 257 45

48 45 39 29 28 19 19 8 2 1 0.5 n/a 124 91 52 27

42 42 37 27 28 13 26 7 1 1 0.5 n/a 102 110 80 21

2 0.000

1 0.001

1 0.000

Total Games of Fortune VIP Baccarat Baccarat Slot Machines Cussec Black Jack Stud Poker Roulette 3-Card Baccarat Texas Holdem Poker Fantan Casino War

13.1% 13.2% 15.2% 10.5% 7.0% 11.6% 16.7% 4.2% -47.5% 22.2% 14.3% 7.1% 5.4%

13.9% 13.8% 14.9% 11.1% 12.6% 7.7% 7.6% 3.6% 59.6% -15.1% 7.7% -14.3% -17.8%

25.0% 25.1% 33.5% 10.8% 5.4% 13.3% 9.5% 13.5% 28.8% 32.5% 21.9% 25.6% 8.4%

3-Card Poker Fish-Prawn-Crab PaiKao Craps Lucky Wheel Makccarat Q Poker Tombola Mini Baccarat Horse Racing Greyhound Racing Sports Lottery - Football Sports Lottery - Basketball Chinese Lottery Instant Lottery

7.4% 0.0% 46.2% -26.9% 14.3% 100.0% 0.0% 0.0% n/a 21.6% -17.3% -35.0% 28.6% 100.0% -80.0%

22.7% -22.2% 8.3% 13.0% 16.7% -50.0% -50.0% 25.0% n/a 45.7% -0.9% 33.3% 75.0% 0.0% 150.0%

-4.3% -2.7% 50.0% 15.0% 20.0% 0.0% 0.0% 0.0% n/a -1.4% 85.0% -11.8% 9.1% 0% -60.0%

1Q 2009

4Q 2008

26,252 26,019 16,828 5,804 1,533 687 489 223 150 47

24,358 24,078 15,616 5,186 1,478 654 503 174 177 42

32 44 18 21 52 10 24 6 3 4 0.5 n/a 90 45 72 55

20 45 1 13 49 9 25 6 2 7 0.5 n/a 126 53 83 17

1 0.001

2 0.000

1 0.001

-2.4% -2.3% -3.2% 1.6% 0.0% -7.1% -11.7% 28.2% -16.7% -14.9% 0.0% -11.4% 137.1%

7.8% 8.1% 7.8% 11.9% 3.7% 5.0% -2.8% -4.4% -15.3% 11.9% 60.0% -2.2% 1358.3%

-7.0% -7.3% -9.5% -2.7% 3.6% -9.8% -3.3% 5.8% 24.6% -12.5% 5.3% -8.2% 20.0%

9.5% -28.8% -20.0% -16.7% -16.7% -33.3% -50.0% -20.0% n/a -21.1% 33.3% -5.6% -56.0% -50.0% -1100.0%

61.5% 6.1% 11.1% -4.0% 0.0% 50.0% -42.9% 0.0% n/a -28.6% -15.1% -13.3% 47.1% 100.0% -110.0%

-23.5% -3.9% -40.0% -7.4% 0.0% -33.3% 0.0% 25.0% -100.0% 20.0% 0.0% 59.6% 183.3% -50.0% n/a

Macau Patacas (Million)

Total Games of Fortune VIP Baccarat Baccarat Slot Machines Cussec Black Jack Stud Poker Roulette 3-Card Baccarat

25,619 25,408 16,287 5,898 1,533 638 432 253 125 40

32,036 31,781 21,742 6,536 1,616 723 473 215 161 53 39 49 45 22 36 12 23 6 2 2 0.4 n/a 70 111 60 12

32 39 42 23 37 8 20 5 2 2 0.4 n/a 71 60 68 11

Macau Patacas (Million)

Chinese Lottery Instant Lottery

QoQ%

Source: Gaming Inspection and Coordination Bureau; Bloomberg

QoQ%

CONSTRUCTION AND REAL ESTATE

Macau Patacas (Million)

Texas Holdem Poker Fantan Casino War 3-Card Poker Fish-Prawn-Crab PaiKao Craps Lucky Wheel Makccarat Q Poker Tombola Mini Baccarat Horse Racing Greyhound Racing Sports Lottery - Football Sports Lottery - Basketball

JUNE 2010

Gaming

Going All-In in Macau When a Macau Business team sat down to battle out for a seat at poker’s top table, the action separated the men from the, er, women... BY JOSÉ REIS PEREIRA

o, there’s this game they call Texas Hold’Em… Perhaps you’ve heard of it and maybe even played it. It used to be kind of a mythical game seen in movie scenes where shady characters gathered around a table and gambled until they collapsed from exhaustion or from a well placed assassin’s bullet. Not anymore, poker is now a global phenomenon, with world and continental tours, world championship titles and bracelets, million-dollar prize pots and lots and lots of money being wagered online and in live games. It’s all strictly legal and all very profitable. And so it was that, for the second time, our venerable magazine was invited to participate in a poker tournament – the first time we won second place in a media tournament sponsored by SJM and ended up donating a respectable MOP100,000 to Anima, a local animal protection organisation. We were invited by Danny McDonagh, tournament director of the Asia Pacific Poker Tour, a very nice fellow, with all the charm and patience required to coordinate such events as those now sponsored by PokerStars, the most successful poker website on the planet. The idea is pretty straightforward: a Macau Business team of up to ten players enrolled in the inaugural PokerStars Macau Invitational Corporate Challenge, played last month. Basically, our team members played against each other until a winner was declared. That player will now take part in the Corporate Challenge final in early July, the winner of which is awarded a trophy and sponsorship into the HK$2,000,000 Guarantee - HK$10,000

JUNE 2010

Red Dragon Event on July 9. The 2nd and 3rd placed players will win a HK$1,100 Red Dragon Phase 2 entry. The Macau Business team included yours truly, our CEO, a lawyer, an airline pilot, four journalists, a civil engineering expert and a marketing manager.

Pumped-up As we waited outside the Poker Stars poker room in the Grand Lisboa Casino, we discussed past games and hands, as well as future strategies. The most experienced players even had some time to explain the hierarchy of hands and other details to those less familiar with the game. Let me tell you that, right there and then, some of us were already pumped up enough to consider enrolling in the main event - the APPT Macau Championship. The thing with Texas Hold’Em – a.k.a. the Cadillac of Poker - is that “it takes one day to learn and a lifetime to master”, and so, many players risk too much when they know too little about the game. As soon as we took our seats at the table that Danny had reserved for us, things became more serious, even during the practice period when all pocket cards were facing up. Then, the real thing begun and we were all over each other, checking, calling, raising, re-raising and…bluffing. We each started with MOP1,000 and a re-buy of MOP1,000. Some very nice hands were played and true talents were revealed or re-discovered. As time passed, players were eliminated and early favourites started building their stacks. I wasn’t one of them, but somehow managed to reach the final four until my

CEO got rid of me with a pair of Queens. I also had a pair of ladies but his kicker was higher (Ace against King).

Intense duel The event was supposed to last for two hours, but over three had passed when the final two faced each other for the bragging rights and qualification: our own Paulo A. Azevedo and Maria Garcia, the only lady at the table. The duel was intense and poker was played at the highest level – we were, after all, playing on the 3rd floor of the casino, In the end, female charm and experience prevailed and Maria became our worthy representative in the next phase of the tournament. By then, some of us were thinking of raiding the ATM machine and getting involved in some of the cash games going on in the room, but we resisted the urge and went home instead, thinking what if…? Before I go, here are some elucidating numbers: MOP3,246,200 prize money won by Victorino Torres, winner of the 2010 APPT Macau; 6,494 - the number of players in the main event of the 2009 World Series of Poker; MOP68.3 million - prize money won by Joe Cada, winner of the 2009 World Championship. Finally, some words of wisdom. “Learning to play two pairs is worth about as much as a college education, and about as costly”. - Mark Twain

MGM Grand seeks loan refinancing MGM Grand Macau wants to refinance its five-year loan ahead of its Hong Kong initial public share offering, banking sources told Reuters. MGM Grand Macau, a jointventure between MGM Mirage and businesswoman Pansy Ho Chiu King, already held meetings in April with some of the lender banks to its existing US$1.1 billion facility, which this deal would refinance, the sources said. The loan was led by Banc of America Securities Asia, Banco Nacional Ultramarino, Bank of China Macau, BNP Paribas, CCB International Finance, Hang Seng Bank, HSBC Holdings, Royal Bank of Scotland and Sumitomo Mitsui Banking Corp. HSBC is the agent bank. The refinancing is expected to comprise a term loan and revolving credit, both with five-year maturities, according to Reuters. Sources said MGM was expected to favour a 10-15 bank club to complete its loan.

JUNE 2010

Gaming

Hard luck casino

Singapore’s first integrated resort has had a rocky start. With intergalactic glitches, legendary laryngitis, and worst of all, disappointing casino revenues, the naysayers are having a field day BY MUHAMMAD COHEN IN SINGAPORE

plaque at Resorts World Sentosa (RWS) declares it “Singapore’s first Integrated Resort”. The S$6.6 billion (MOP38.3 billion) property opened months ahead of schedule, but perhaps RWS should have slowed down. In early operations, the integrated

JUNE 2010

resort (IR) has suffered a series of mishaps and, reportedly, casino revenue below expectations. “The poor performance to date shows that they perhaps would have done better to get everything ready before they rushed to be the first to open their doors,” IGamiX Managing

Partner Ben Lee observes. Sheldon Adelson, chairman of Las Vegas Sands, whose Singapore IR Marina Bay Sands (MBS) delayed its debut by several months until late April, looked like a clairvoyant for scoffing, “Let them open first, and we’ll see what

87 mistakes they make.” Indeed, early guests at MBS complained of air conditioning, phone and plumbing problems, plus dysfunctional meeting rooms. Experts are divided on whether RWS is going through the inevitable teething problems or has deeper flaws. “Once they are fully complete and make those necessary operational adjustments, I predict that Singapore’s IRs will be the most popular tourist and gaming destinations in the region,” University of Nevada, Las Vegas Singapore Campus Dean Dr Andy Nazarechuk says.

New Year luck In January, RWS partially opened four hotels without IR amenities. It received

its gaming license and opened its 15,000 square metre (161,459 square foot) casino on February 14, the first day of Chinese New Year, attracting a reported 128,000 visitors in its first six days. Some observers were surprised that Singapore authorities granted the casino license before completion of the Universal Studios theme park, the IR’s centrepiece. As a fig leaf, the theme park grounds opened without any rides or shows operating, charging S$10 charge just to walk through. Travel agents complained that uncertainty about available attractions made it difficult to sell tour packages. Universal Studios launched full operations on March 18. But on March 26, the showpiece Battlestar Galactica

ride closed with problems, and was still down at our deadline. Insult to injury came the same night when legendary singer Tom Jones left the RWS stage after two songs with severe laryngitis. Another sour note was hit in May: Saint James Holdings, Singapore’s top nightspot developer, abandoned its plans for a club there.

Soft and loud The impact of these early incidents on RWS remains difficult to measure. The company has been tight-lipped with information, including visitor and revenue numbers. RWS refused to comment for this article, saying the development is still in its “soft opening stage”. Construction will go on through next year on the 49-hectare (121 acre) site. Some believe the situation will improve when the rollercoaster reopens and the resort’s first phase is complete. Voyage de Vie, a resident modern circus show, opens this month and more shops open weekly. These additions, plus shaking out the early bugs and better adapting outdoor areas for the relentless tropical heat, could broaden the resort’s appeal. But some issues suggest a lasting struggle for RWS, located on Sentosa island just off Singapore’s southern coast. The early glitches have reminded Singaporeans of Sentosa’s reputation for failed leisure attractions and island’s physical and psychological distance.

Disneyland Redux Universal Studios’ problems recall the travails of Hong Kong Disneyland, which has struggled to recover from early public relations nightmares. But visitors to Universal Studios Singapore report enjoying themselves, even without the idled rollercoaster. The park hasn’t cut ticket prices – S$66 for adults, S$72 on weekends and holidays, well below other Universal parks – but has included a S$15 restaurant credit. It is already attracting international tourists, a key goal for RWS and Singapore authorities. “We have many clients interested in Singapore now, really different from before,” Junko Cheung of JC Travel in Hong Kong sayd. “Before they always dismissed Singapore as boring, nothing to see and do. But now that there is a major tourist attraction, they want to go. JUNE 2010

Gaming

But the theme park and casino may not create synergy: “Linkage of theme parks and casinos hasn’t had a great track record,” University of Nevada, Reno Institute for the Study of Gambling and Commercial Gaming Director William Eadington observed.

But David G. Schwartz, Director of the Centre for Gambling Research at University of Nevada, Las Vegas believes there is some synergy between the theme park and the casino, “Since the casinos are supposed to be luring des-

tination travellers, it’s possible that part of the family will go to the theme park, and the other part will gamble.”

Missing the bus Many RWS visitors are tour bus passengers from Malaysia.

A veteran gaming industry executive in Singapore requesting anonymity contended that, rather than a compliment to the casino, “the theme park is a distraction that competes for the limited time of visitors”. Genting’s Malaysian roots

Numbers, please

onths after the opening of Singapore’s casinos, basic gaming statistics – routinely made available in Macau and other jurisdictions – remain under wraps. The Lion City’s Casino Regulatory Agency (CRA) has ignored repeated inquiries about the numbers. Filling the official silence, experts’ theories range from preserving commercial confidentiality to overwhelmed regulators assigning public information a low priority. The most colourful scenario suggests that authorities want to reassure VIPs that the government can keep secrets. Regulations require advance reporting of junket customers’ arrivals in Singapore and disclosure of benefits they receive; keeping casino numbers under wraps shows that Singapore JUNE 2010

doesn’t always tell all it knows. Data on casino revenue, gaming preferences, and local versus foreign players, provide raw material for Singapore businesses to share in the growth from integrated resorts. The IRs aren’t only about attracting tourists, but creating new opportunities for Singaporeans, particularly the citystate’s best and brightest who are now often tempted to move overseas. “Data and statistics enable people to figure out what kind of product they should do and what businesses they can create,” Singapore’s leading nightclub impresario, Saint James Holdings CEO Dennis Foo, says. “That’s why I believe those numbers will come out over time.”

89 figure prominently in another strand of criticisms about RWS. IGamiX’s Ben Lee observed the resort evoked a “typical Singaporean reaction to a Malaysian effort: not good enough for Singapore. “The press, analysts and commentators have all given RWS a hiding – and for good reasons. From charging for the cloakroom to poor signage, to non-existent customer service in the casino, the management has introduced a definitely Malaysian standard resort to what was supposed to be a world class IR.” The core issue isn’t national origin, according to Lee, but “management that is unused to free market competition and the well-known Singaporean finickiness”” Many observers including Lee expect that Marina Bay Sands, seasoned in competitive Macau and Las Vegas, will outperform RWS. But finding qualified hospitality personnel for a combined 20,000 new positions presents challenges for both IRs.

should have earned a lot during that period.” He adds that since the opening of Marina Bay Sands, “high value players are moving”. (See box: [casino comparison]) “There is a small gaming market here,” the veteran local gaming industry executive sayd. “Propensity for casino gambling is very low.” Many Singaporeans re-

main reluctant to pay the S$100 entrance fee. The Lion City’s restrictions on junket operators also limits VIP business, despite a low 12 percent tax rate on high roller play. The opening of Marina Bay Sands means cannibalization of the market, not expansion, the executive addd. “As the world economy continues to strengthen I be-

lieve that the numbers at both IRs will exceed analysts’ expectations,” UNLV Singapore’s Nazarechuk sayd. “There is nothing in the region close to the level of quality and entertainment value that these two projects offer to customers.” Resorts World Sentosa and Singapore are betting on it.

Gaming key The key factor for RWS is gaming revenue. A leak, presumably from RWS, reported casino revenue of S$20 million for the first two days of operations. Singapore elder statesman Lee Kuan Yew announced the true two-day figure was S$7 million. Since the opening, most analysts have cut their estimates for RWS revenue and Genting’s share price has been beaten down. Last month, Genting reported first quarter earnings before interest, tax, depreciation and amortization (EBITDA) of S$109 million for RWS. “They had a monopoly from February 14 to April 27,” AG Leisure Partners Managing Director Sean Monaghan noted. “They JUNE 2010

Gaming

Tale of two casinos Singapore’s Resorts World Sentosa has the most games, Marina Bay Sands the most class – and now the most customers BY MUHAMMAD COHEN IN SINGAPORE

ingapore’s government dictates that both the city’s integrated resorts casinos are the same in every key respect. Both also have the same primary marketing strategy at this early stage: dozens of buses daily hauling gamblers over the border from Malaysia. But on the gaming floor, Singapore’s casinos are very different. “Resorts World is gambling without atmosphere,” AG Leisure Partners managing director Sean Monaghan contends. “Marina Bay Sands has a presence.”

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With gold the dominant colour, three levels ringing the main floor to create a stadium effect, and crowned with a seven ton Swarovski chandelier 40 meters above, the 494-table, main gaming floor at Marina Bay Sands (MBS) feels like a place to find James Bond. Resorts World Sentosa (RWS) casino feels more like to place to find a bus. The different aesthetics fit the resorts’ divergent target markets – business travellers and urban sophisticates at Marina Bay, vacationers at Resorts World.

Customer isn’t always right Marina Bay Sands is suing the organisers of the first conference to take place at its Singapore complex. The move comes after payment was withheld for an event during which the power failed and delegates from the InterPacific Bar Association (IPBA) complained of unfinished rooms, Bloomberg reported. Marina Bay Sands, a Las Vegas Sands subsidiary, is seeking US$214,000 from IPBA 2010, according to a lawsuit filed with the Singapore High Court. The IPBA organising committee said in an e-mailed statement to Bloomberg that it wrote to Sands on May 6 to propose compensation and a meeting on May 11 was followed by the writ. Marina Bay Sands said in an e-mailed statement it had made a police report regarding power disruption at its property and its meetings with IPBA “unfortunately failed to resolve matters.”

sino’s central area, with 219 tables, admits natural light and has an open feel under the high ceilings. Its two wings where smoking is allowed have lower ceilings and a more cramped feel, particularly when crowded, and seem worn after just four months. One wing, the Orchid Room with 50 tables, is reserved exclusively for Singapore residents, who complained they couldn’t find space at tables after paying their S$100 entry fee. Among more than a dozen games offered at RWS, baccarat dominates with minimum bets from S$50, adjustable by table and time of day. As at owner Genting’s Highlands casino outside Kuala Lumpur, RWS has a heavy representation of roulette – with minimum bets as low as S$4 – and pontoon, a blackjack variation. There are also three busy electronic gaming table areas with nearly 300 seats for roulette and baccarat games run with live dealers and betting at individual terminals.

Less choice, and smoke

RWS lacks a wow factor, but the 370-table, main gaming floor has a comfortable, familiar feel. Maybe it’s the self-serve water – in environmentally friendly paper cups rather than plastic bottles – and tea; attendants dispense coffee and soft drinks. Incredibly, the casino floor includes seats not directly in front of the gaming tables or one of its 1,092 gaming machines; they’re just for sitting. Despite being below the IR’s ground level, the RWS ca-

There are no electronic gaming tables in Marina Bay Sands but there are plans to add them to its total of nearly 1,600 gaming machines. MBS’ table game choices are narrower than at RWS with just “six to eight major games” according to MBS CEO Thomas Arasi, including blackjack, baccarat, sic bo, roulette and a surprisingly straightforward version of stud poker. Minimum bets are generally higher at MBS, from S$10 roulette to S$100 for baccarat. The first level smoking area at MBS houses about 370 tables and nearly 1,000 machines. High ceilings let the smoke disperse. “The casino is like no place else,” Daniel Reviv, a Special Adviser to RWS developer Las Vegas Sands Chairman Sheldon Adelson says. “The question is whether [Malaysian and Indonesian] customers will feel comfortable in this setting.” “In every other gaming market where a player has choice, the high-valued player gravitates to the better facility,” AG Leisure’s Monaghan says, noting that MBS opens more than 400 tables at peak times, versus less than the 200 at RWS. “I think it is going to be tough for Genting to secure and/ or retain the high valued player. The quality difference is far too significant: their facility looks very, very basic versus Marina Bay Sands. The market share issue will become more and more pronounced over time.” JUNE 2010

Gaming

Goa floats online regulation as casinos see taxes upped

greater detail and make necessary recommendations,” Kamat said. “I also intend to study the possibilities of commencing online gaming as part of entertainment facilities for visiting tourists,” he added. Kamat laid out the plans after announcing that entry fees to land-based casinos in Goa would be lowered from Rs 2000 to Rs 500. However, days later, in a sucker punch to the industry, the Goa civic corporation upped the annual trade tax on casinos nearly seven-fold, from Rs 7,150 to Rs 50,000, in its annual budget. Carolina Po, Mayor of Goa’s capital Panaji, said the move to up trade tax rates would guarantee much needed revenue for the civic agency. Referring to the controversial casino boats on the Mandovi River, Po said: “They should be able to pay up at least as much. They are parked off Panaji and their offices are located on the banks of the city.” Kamat said he had reduced entry fees in an effort to “rationalise the fee structure and provide relief to the industry”. The reductions mark a complete turnaround in the government’s position after last year Kamat hiked the entry fees from Rs 200 to Rs 2000. Those increases were thought to be an effort to appease political and social opposition to casinos during Assembly and parliamentary elections, when Kamat also promised to send Goa’s riverboat casinos “out into the deep sea”. There were demonstrations in the capital as casino workers protested against the ten-fold hikes and Kamat said when reversing the increases that he had received representations from the land-based industry to lower the fees.

BY JOE THOMPSON*

Casinos in court

The Indian move oa has lowered entry fees but upped taxes for its casinos in a bid to maximise profits from one of India’s only regulated gambling industries, while state politicians also say they could look to regulate online gaming in future. Goa Chief Minister Digambar Kamat echoed Home Minister Ravi Naik’s assertion last year when announcing that the government would introduce new legislation to regulate its casinos in response to ongoing criticism of Goa’s existing Public Gaming Act.

JUNE 2010

Goa is one just a handful of Indian states with a regulated casino sector, allowing slot machines in five-star hotels and also table gaming on cruise ships. However, Goa’s casinos have been subject to political and legal scrutiny in more recent months and the state’s government has remained under pressure to impose tougher rules than those included under 1990s amendments to the state’s 1976 Gambling Act. “I propose to set up a committee in association with the financial intelligence unit to examine the issue in

Attempts in June last year to move the offshore casinos from the Mandovi River out to sea have since resulted in a case at the High Court of Bombay at Goa, and the boats are not moving for now. Still, Kamat’s announcement that entry rates would be once again lowered drew criticism from the anti-gambling groups the government were keen to placate last year. Aam Aurat Aadmi Against Gambling (AAAAG), an organisation which has raised concerns over the government’s alleged close relationship with the gambling industry, said the lower

93 rates could bankrupt normal working people. Sabina Martins, spokesperson of AAAAG, told the Indo-Asian News Service: “The government which calls itself the ‘Aam Aadmi sarkar’ (common man’s government) has not even done an assessment of the negative impact of the casino [industry] on the families in Goa, especially women, children and youth.” Should Kamat’s announcement lead to regulatory change, Goa would be the second state in India to introduce online gaming legislation as leading operators still await licences from the equally small northern state of Sikkim. Previous reports had stated that the Sikkim government hoped to get online gambling in the state up and running by the start of this month after its Online Gaming Regulation Act came into effect in March 2009. William Hill and Betfair are among those international operators to have confirmed that they are looking to move into the Indian market via Sikkim, with the firms stating last November that discussions to secure necessary working partnerships with Indian busi-

nesses are on-going. A spokesman from William Hill told The Independent last year: “I can confirm that we are interested in entering the Indian market and we are in discussions with potential partners at the moment.” Gaming regulators in Sikkim are yet to make any further announcement regarding the situation and they are not believed to have issued a licence as of the beginning of March. It was originally reported that the Sikkim government was targeting having a licensing and regulatory regime in place in time for start of football World Cup in June. However, outside the state new draft lottery laws being proposed by India’s central government could come to set a dangerous precedent for online operators in India. Operators are seeking the only available licences from Sikkim on the assumption that they would be able to offer their services to India’s 1.2 billion people, and take a slice of an underground betting market thought to be worth US$60bn. Online gambling is already thought

prominent in India in the area of staterun lotteries that are offered under a 1998 lottery law that permits each of India’s 28 states to offer lottery games.

Controversy online But online lotteries have also caused controversy where lottery games have reportedly been made available by internet and mobile phones including in states where lotteries remain altogether prohibited. The Indian government’s draft lottery rules would now empower state or central governments to ban lotteries from other states, and enable them to forcibly prohibit the operation of online lotteries organised in other jurisdictions in India. The rules promulgated by India’s central government last February apply specifically to online lotteries, which the regulation defines as “a system created to permit players to purchase lottery tickets generated by [a] computer/online machine.” It is not clear how they may apply in the case of online casino-style gaming. *Exclusive GamblingCompliance/Macau Business

JUNE 2010

This gaming life Tenacious, straight-talking and the owner of a fine sense of humour, Len Ainsworth is the man of the moment. He follows the founder of Genting, Lim Gok Tong, and Stanley Ho Hung Sun to take this year’s G2E Life Achievement Award. As he approaches his 87th birthday, the founder of Aristocrat and chairman of Ainsworth Game Technology has no doubts: more Asian countries will legalise casinos by Paulo A. Azevedo AFTER two awards given to well known gaming operators you are the first slot machine manufacturer to be chosen. Surprised? Len Ainsworth: The achievements of the late Lim Gok Tong and Stanley Ho are nothing less than fantastic and as a slot machine manufacturer I can only stand in their shadow. Yes, I am a little surprised to be chosen, pleased, yes very certainly. It has been a long and, I’m sure, interesting ride. You started your journey in 1953 and are responsible for one of the most well known brands in the gaming business. How would you sum up your journey? I have enjoyed every minute of my time in the slot machine industry notwithstanding the adversities that popped up on a regular basis, whether they be economic times, technical difficulties, corrupt police or whatever. As the saying goes I wouldn’t be dead for millions. It has been fascinating to see the growth of the industry worldJUNE 2010

wide, particularly given that back in 1953 the only market known to us was NSW, Australia. Yet, at that time it was the second largest market in the world after Las Vegas. Times have changed and now gaming is in virtually every country of the world in one form or another. Nothing is surer than the fact that gaming will continue to expand if for no other reasons than government need the revenue and people need to be entertained. No country can afford to have a major portion of its cash resources exported to a neighbour.

six months later with undiagnosed aggressive prostate cancer. I turn 87 in July, I will still be working. I enjoy what I am doing and quite frankly it provides no end of entertainment as well as allowing me to meet many interesting people around the world. Am I stubborn? No, however I am tenacious and prepared to go the extra mile to ensure a result. Do I want to have a say? Well I like to know what’s going on but believe I have perfected the art of delegation. Delegation however is like passing the ball, if there is no-one there to catch it you have to find other means.

I believe your main challenge came when you faced prostate cancer in 1994. Yet, here you are, at 87, working every day, early mornings. Are you a stubborn fighter or just someone who always wants to have a say in things? After a fortunate and healthy life the diagnosis of prostate cancer was a surprise and the surgeon who told me that I might not last 12 months was himself dead

Since 1960 you’ve travelled the world, on average, four times a year. How important were those millions of globetrotter miles to understanding the planet and business without frontiers? Whilst it is nice to get away from work from time to time sitting in an aircraft for 24 hours to get to Europe, or 18 to get to Las Vegas can be tiresome, but faceto-face meetings with customers and contemporaries are essential

97 in this industry. Given the correct season i.e. winter at my destination then a couple of weeks skiing is the order of the day so it is not all work. Your children still hold 30 percent of Aristocrat. So, I guess you don’t talk business during Christmas lunches? My seven children are all successful in their own right and I speak with them from time to time and maintain contact with my grandchildren, but they too are almost adults and the majority already have their University degrees. Lunch – yes I am a barbecue specialist. Talking of business, how do you see gaming in Asia? Macau has surprised almost everyone after the liberalization, but Asia, it seems, has fantastic growth prospects…?

Macau has its origins back in the early 60’s thanks to Stanley Ho and Singapore with its clubs, Malaysia with its clubs and Genting are all very well established as is gaming in the Philippines. Macau, I believe, will

continue to grow but they need to provide other interests apart from casinos themselves if they are to get players other than from China, but the Macau casinos don’t need to play second fiddle to anyone. Transportation could be

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A true pioneer Len Ainsworth is known throughout the worldwide gaming machine industry as having pioneered many of the major design and technical innovations incorporated in gaming machines for half a century. He has long been acknowledged as the industry leader in Australia and is widely respected for the contribution he has made to it, especially for the contribution poker machines have made to the financial success and standing of licensed clubs. He founded the company which became Aristocrat and, despite fierce international competition, was responsible for building that company up to become the second largest producer of casino style gaming machines and gaming machine systems in the world today, and by far the largest in Australia. In 1994, Len was admitted into the Australian gaming industry’s Hall of Fame and in 1995 into the gaming industry’s American Hall of Fame.

JUNE 2010

improved and I know that it is high on the agenda. Those countries in Asia who do not have casinos will, I believe, in the fullness of time establish them if only for the fact that they cannot afford to see money from, for example Thailand, slipping across the border to Cambodia. There are prospects in Thailand, growing prospects in Cambodia and Vietnam, and India is awakening. Japan already has minor gambling with Pachinko and Pachslots – casinos will surely follow. Even the Muslim world will find that it needs to establish casinos in its international centres, particularly large hotels. Russia is a sleeping giant and China will, I am sure, establish other centres in the fullness of time. What are the main challenges for slot machine makers in the Asia market? For a slot machine manufacturer the challenge in Asia is to meet the competition of many companies who are able to make a machine for a lot less cost, even though these days most if not all of the major manufacturer’s use electronics from Asia, say Taiwan or China, and have tooling done in the same place. Many of the small European manufacturer’s have their machines virtually manufactured in Asia and content themselves with producing games. It needs to be remembered that the class of machine required by casinos is distinctly different to that for the various street markets or AWPs in the

world. So the leading manufacturers with long established backgrounds are likely to stay out front despite price disparities. At this month’s G2E Asia Ainsworth is introducing a new machine, the A560. What is the formula for a good product? The G2E Asia will be the first showing of our all-new A560 in a limited number of versions. The formula for a good machine is player appeal and unfortunately that has yet to be defined, but even more fortunately that is something that whether in my iteration as Aristocrat or Ainsworth we happen to have. This Life Achievement Award is just one of many. What are the past recognitions you treasure the most? This proposed Life Achievement Award is greatly appreciated and will be equally valued as my past recognitions. The one’s I treasure the most are the Membership of the American Gaming Hall of Fame with Bertrand Cohen and Donald Trump on the same platform, and some hundreds of guests singing “Tie Me Kangaroo Down Sport” at the top of their voices. The other is the wonderful party given me by the Australian industry where some hundreds of industry notables gave me the time of my life along with Life Membership of the Australian Gaming Manufacturer’s Association, which I founded.

Dissecting the dragons It’s G2E Asia time again and for anyone with an interest in the future of the region’s gaming industry and how it fits into the global picture, it is a must-attend meet by Luciana Leitão

MACAU’S deserved and meteoric rise to become the ‘Las Vegas of the East’ has been well documented, but there are other emerging gaming markets in Asia. The focus of this year’s G2E Asia conference program will be on them, while positioning the ‘dragon’ players in a global context. On the first day of conferences – June 8 - the focus will be on global markets, with experts such as the president and CEO of Marina Bay Sands, Tomas Arasi, in Macau to discuss Singapore’s bidding, construction and regulatory process. Another session will see experts discuss Japan, Taiwan and South Korea, the differences in their gaming markets and their possible global impact. South Korea has had gaming for many years, legalisation in Taiwan is in its infancy and it has not yet arrived in Japan. Taiwan’s new market – and the rejection of a gaming referendum in the Penghu Islands – is under scrutiny, with specialists, such as Benjamin Li, attorney from Lee and Li Attorneys-at-Law, discussing the shape of the planned casinos. The last conference session on the opening day will be about emerging jurisdictions, like Vietnam, Thailand and India. Several gaming specialists will discuss Vietnam’s gaming future and its projected integrated resorts, as well as India and Thailand’s big casino potential. The Philippines, Cambodia and Malaysia’s already established gaming industries are not forgotten, and will be assessed by a panel of specialists. Macau on the table “Gaming Floor, Macau and Marketing” is the topic of the second day of conferences on June 9. The day kicks off with Sean Monaghan, managing director of AG Leisure Partners, who will assess the future of the VIP market in Asia, referring to Macau, Las Vegas and Singapore’s different models. He will address junket operations, taking into account current market constraints and increased competition. Technology and gaming The second conference of the day focuses on technology, with speakers such as Catherine Burns,

vice-president and managing director of Asia Pacific Bally Technologies, and Doug Bertinshaw, vicepresident of Global Product Planning and Strategy, of Aristocrat Technologies. They will appraise how Asian casinos use technology to increase revenues. Another topic for discussion that day will be non-gaming amenities and how they will contribute to a diversification of the tourism market. Peter Caveny, principal investor relations, from Galaxy Entertainment Group, Andy Nazarechuk, Ed.D, dean of the University of Nevada Las Vegas (UNLV) Singapore Campus and Paul Steelman, CEO of Steelman Partners, will talk about the MICE business and other ways to attract visitors to Macau. Specialists will also analyse the game of baccarat from the perspectives of the VIP and mass markets, in a conference entitled “Generating revenue by playing games”. Cotai: The future The plans and progress of the Cotai Strip will be one of the hottest discussion topics on June 9, with experts from around the globe discussing the future of the strip. When complete, what will Cotai mean for the Macau market? Specialists such as Walt Power, COO of New Cotai Entertainment and Greg Hawkins, president of Melco Crown Entertainment Limited/City of Dreams, will dedicate a whole hour to discuss. On a very busy conference day, loyalty programs in Asia are also to be discussed, as well as slot machines. At this session, slot managers from around the region will discuss the games and the technology which aims to grow the market. On the final day of the G2E Asia conferences, June 10, chief officers from gaming’s big players will analyse the industry’s future in Asia, looking at development, finance, marketing, operations, regulation and technology. Robert Drake, group chief financial officer of the Galaxy Entertainment Group, and Rafael Butch Francisco, president & COO of Philippine Amusement & Gaming Corporation (PAGCOR) will do the honours. JUNE 2010

100

On a junket Gaming analyst Sean Monaghan sees a promising future for the VIP market, even with the current market restrictions by Luciana Leitão

LONG-time industry watcher Sean Monaghan contends that the VIP market is tightening its dominating grip on Asia’s casino business. And this is the topic CB Richard Ellis Asia Gaming Group’s recently appointed senior director will discuss at G2E Asia in Macau. The VIP type of market feeds on junkets or other intermediaries between the players and the casinos. According to Monaghan, many Asian casinos use these intermediaries to source new gamblers. “These players often live in different countries and want credit,” he explains. Given the amount of business a junket operator can bring, casinos pay them a big fee. In turn, the junket covers all the costs associated with bringing the player.

Sean Monaghan CB Richard Ellis Asia Gaming Group

Evolution Up to now, the VIP market has dominated the Asian market, because it provides additional business to casinos that they would not normally be able to obtain. And, given increased competition and marketing constraints - let us not forget that just over the border in China gambling is still illegal - the junket market is evolving towards “consolidation”, but a coming together of the junket and mass markets still seems far off. In fact, according to Monaghan, junkets are getting bigger and are

JUNE 2010

able to demand more and better facilities in the main casinos. “They are also demanding very competitive terms for the business they bring,” he adds. In Macau, the VIP market accounts for 80 percent of revenue. In the future, according to Monaghan, the mass market will grow, but not as much as to invert the tendency. The large junket agents have extensive marketing activities, and are thus able to “secure players from all sizes”. Macau, Las Vegas, Singapore The Macau model differs from that of Las Vegas – where the mass market dominates – and it also differs from Singapore. “Junket operators have yet to be licensed in Singapore and, as such, they do not represent a significant portion of the business”, explains Monaghan. Relying on the VIP segment, the Macau casino model will continue to exist, “as long as there are currency restrictions out of China and so long as China does not recognise gambling debts”. These constraints determine that the VIP market dominates Macau. So, until the governments change regulations, Asia and Macau will remain dependent on VIP revenue. Thus, according to Monaghan, given these restrictions, junkets serve a useful function and will continue to do so for some time.

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Strip tease City of Dreams president Greg Hawkins believes Cotai’s future is promising, but it will have a different feel from Las Vegas by Luciana Leitão

THE original vision may have been

Greg Hawkins President City of Dreams

for a Las Vegas-style strip in Macau, but for president of City of Dreams, Greg Hawkins, the Cotai version of the most famous piece of collective real estate in gaming will have a distinctly different energy and feel to it. At G2E Asia Hawkins will outline Cotai’s plans for the development of a “world-class environment comprising both gaming and, in particular, non-gaming experiences”. The integrated resorts that are now operating on the Cotai Strip and those that will open over the next 18 months combine retail, restaurants and entertainment. City of Dreams is one of them: “It will open a truly world class production soon in the shape of the world’s most state-of-the-art water theatre that will seat 2,000 guests,” says Hawkins. As infrastructure develops as well as property connectivity, Hawkins believes Cotai will become a standalone destination in itself, with visitors experiencing multiple properties during their stay. It will also bring good career development opportunities for local inhabitants. Cash crisis slowdown A substantial number of Cotai properties are still to be developed and this is down to the global financial crisis.

City of Dreams opened its doors in the middle of the cash maelstrom, and, according to its president, is now “in a strong position to drive greater loyalty and establish the brand in the marketplace”. Given the delay of a big part of the construction works on the strip, the Government recently sent letters to developers demanding answers. In response Hawkins says: “We take the view that the more development there is on Cotai, the greater the positive impact on all businesses in this region. We support further property and infrastructure developments in Cotai and feel the government is managing this process very well.” The road ahead Hawkins believes Cotai will change the course of Macau’s history. “It will introduce to Macau further world class experiences and brand names,” he says, explaining that it is “critical” for the growth of tourism. In the end, Cotai will be viewed as an alternative to the peninsula. Later developments will be important: “The arrival point has an influence as well, so as enhanced infrastructure occurs I think you will see an even greater shift of new tourism to Cotai. Property targeted branding and niche market focus will occur even more as the larger resorts on Cotai will attract a greater share of mass market tourism.”

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The promised lands A large, wealthy population is common to Taiwan, Japan and Korea, so naturally the giants of gaming are coveting them. But will their governments – and people - bite? by Luciana Leitão

BEFORE Taiwan can have casinos

Michael Chen President Harrah’s Entertainment, Asia-Pacific region

Benjamin Li Li and Lee Attorneys-At-Law

JUNE 2010

or not, the Taipei government has to provide clearer guidelines. That’s the view of Benjamin Li, of Li and Lee Attorneys-At-Law, and for the president of the Asia-Pacific region for Harrah’s Entertainment, Michael Chen, although Taiwan, as well as Japan and Korea, are very interesting gaming markets, their ultimate attraction will depend on the government policies. These are just two of the specialists speaking on “Japan, Taiwan & Korea: The Promised Land?” conference at the G2E Asia. Li says gaming in Taiwan is still untested: “The only experience we have is the lottery and the sports gaming. Resort-type casinos that offer table game or slot machine game are so far non-existent,’’ he says. Last year, gaming was legalised but the process remains at a preliminary stage and relates only to the outlying islands. Moving forward depends on the approval, through a referendum, of residents. “So, if the residents of the outlying islands decide not to approve gaming, the government will not move further,” says Li. Experience in Penghu After legalising gaming a referendum was held in Penghu and its residents voted no “The opposition was very organised; they successfully captured the media attention, throwing a different agenda on a daily basis,’’ Li says. In the attorney’s opinion, gaming will be helpful to the economy, but the foundations are still lacking. “The casino control act is still being drafted, while the government has not put together a feasibility test,’’he explains.

Concrete numbers are lacking. The next referendum will probably come in three years time, maybe in Kinmen (another outlying island). However, before this happens, the government “needs to address the issue more delicately to the residents”. The next two years will be critical Li says: “If the government cannot articulate a strong plan or have the casino act enacted, it is unlikely that casinos will become a reality in the near future.” Singapore’s reality will, probably, be used as reference, when it comes to choosing the right model for Taiwan. “What we received from different sources is that the government attempts to resemble the resort type casino, using Singapore as reference,’’ Li claims. Great potential Japan, Taiwan and Korea are three markets with potential. South Korea has gaming for many years; in Taiwan it was recently legalised, while in Japan it is still being discussed. According to the president of the Asia-Pacific region for Harrah’s Entertainment, Michael Chen, the company is looking to pursue gaming projects in Asia. Are these three countries a possibility? “We’re interested in all three,’’ says Chen. The attraction on each market depends mainly on certain factors, such as the policies the government puts forth. “But, since the government hasn’t put forth policies yet, we don’t know which one is more attractive.” They all have large populations and wealth, however, to be considered attractive for investment purposes, it’s a different story. It all comes down to the policies, regarding tax rates, benefits and location, says Chen.

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The game changer Macau’s tourism industry needs a breath of fresh air, and Galaxy’s Peter Caveny believes a game changer is on the way by Luciana Leitão

AN economy based entirely on VIP

Peter Caveny Investor Relations Chief Galaxy Entertainment Group

gaming cannot live long. So, how can Macau attract different types of visitors? According to Peter Caveny – who will speak at G2E Asia about how non-gaming amenities have the power to attract visitors - everything will change in the next year due to the fact that a number of big infrastructure projects will be completed by then. Physical barriers mean people cannot reach Macau, and for Galaxy Entertainment Group’s investor relations chief Peter Caveny, the extension of the Gongbei gate, the upgrading of the original ferry channels, the continuation of the Pac On ferry channel and the increase in size of the Guangzhou Airport are breaking those barriers down. “Given all of that, the enormous amount of infrastructure will change the dynamics of Macau for a resortholiday type leisure,” he says. Changes ahead These changes will allow people from the mainland, who could not previously come to Macau, to access the region. “People that want a true resort experience, a true holiday experience, will be able to access Macau much more readily.” The elimination of those physical barriers, together with the construc-

tion of new amenities, such as big, Asian, resort-style hotels, will mean a change in the profile of Macau visitors. According to Caveny, there hasn’t been significant investment in the MICE industry or in other nongaming amenities. “Everyone sort of thinks: If you build it, then they’ll come…” But the question remains: “How do you get to Macau?” Until now, says Caveny, you can’t, because the infrastructure is not ready. Holiday experience These people are looking for a resort-style holiday in Macau he says, adding: “Galaxy is bringing a true resort. None of the other so-called resorts in Macau are offering Asiancentred resorts with the biggest range of Asian food in town, and a big beach…” Caveny goes on: “Last year, 11 million people from the mainland came to Macau. Last year, 22 million people from the mainland went to Sanya, to the resort, because they have the infrastructure to get there”. In 12 months time, Macau will have them also and they will have the opportunity to get to a different environment, he claims. “Everybody tells you they’re building resorts, but they’re not. We’re building a resort with water features, cabanas, al fresco dining. It’s a leisure resort,” he insists.

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Aristocrat “bites” G2E Asia JUST when you thought it was safe to go back in the water…. Aristocrat returns with a “bite” as it launches JAWS Jackpot link at this year’s show. JAWS puts a new spin on Universal studios’ classic Academy Award-winning box office smash. The complete JAWS link package has been hand crafted to excite players with themed cabinets and signage designed to really stand out on the gaming floor. The range of exclusive JAWS jackpot video slot games combine iconic JAWS music, film footage and symbols to deliver an action packed and unforgettable player experience. JAWS is all about the hunt and the thrill of the chase, bringing new levels of excitement to casino gaming floor. This will be one of the highlights at this

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year’s show. Aristocrat also welcomes the legendary tale of Huang Long – Yellow Dragon to its successful Hyperlink family at G2E. Yellow Dragon is based on Aristocrat’s most successful hyperlink released in Asia - Fa Fa Fa. Combined with amazing Asian themed graphical animations and top performing games 5 Dragons, 50 Dragons and the highly anticipated 100 Dragons, Yellow Dragon it is set to be the next big hit in Asia. Fa Fa Fa and Bank Buster will be showcased with a range of new support games and Jade Mountain will make its debut at this year’s show. Jade Mountain is Aristocrat’s latest Asian themed Xtreme Mystery graphics package, which provides ultimate flexibility

in combining your favourite Aristocrat standalone games under a Mystery link, with up to 3 levels of jackpots. And there’s more. Show attendees will also get a “sneak peak” at next years range of innovative products set to hit Asian markets.

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Aruze gets Lucky Gaming company brings Lucky Sic Bo to G2E Asia FAST-growing company Aruze Gaming continues to excite and entertain players of its award winning gaming products, and this year, they will again exhibit products at G2E Asia in Macau. In focus will be its award-winning Lucky Sic Bo G-STATION multiterminal gaming product. Lucky Sic Bo features both a Mystery Progressive Jackpot and a groundbreaking Bash Button which allows the player to control when the dice are rolled. In addition to Lucky Sic Bo, Aruze will also display for the first time in Asia, Shoot to Win Craps, and a G-STATION multi-terminal gaming product based upon Craps where the player again has the ability to shoot the dice to win. Shoot to Win Craps gives everyone playing the opportunity to be the shooter and includes the complete rules of Craps, as well as an easy to use interface for player wagering.

These innovative gaming concepts are just a few of the products on display at this important show. Aruze Gaming looks to use G2E Asia as an opportunity to further set itself apart from other gaming manufacturers with its diverse product line. This yearâ&#x20AC;&#x2122;s show will also feature some never-before-seen gaming concepts from Aruze. These concepts, codenamed GDX7-8 and GLC3X, promise to excite attendees with innovative technology that canâ&#x20AC;&#x2122;t be missed. Aruze will also display its notable multi-media sensation, Rock You Queen, which is based on the music and videos of the international mega-rock group, Queen, and is already a success in many casinos. This game features video music clips and animations of the band in an exciting experience that delights both players and spectators alike. The game has multiple bonuses with free spins and added multipliers to a second screen bicycle race which occur frequently keeping players entertained. Additionally, Aruze will feature many of its popular G-SERIES game titles in its reliable G-ENEX cabinet as well as its ergonomically designed G-COMFORT slant tops. This is the first opportunity for the G-COMFORT slant top to be on display in Asia. Aruze will also feature its G-SYSTEMS technology which is designed to revolutionize how currency and credits are moved between the player and games on the floor. This technology a bill acceptor that can accept multiple currencies, a Voice over IP (VoIP) communications network that provides customer service enhancement and an electronic gaming card that allows for the easy transfer of funds between games.

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Multigames by Atronic Slot and systems company brings strong line-up to Asia ATRONIC will showcase a broad portfolio of multigames, linked gaming products, innovative core games and systems solutions specifically targeted to meet the needs of the Asian market at the G2E Asia show. Once again ATRONIC will be joining its Asian distributor, RGB Sdn. Bhd., at Booth #428 at the Venetian Macao Resort Hotel. At the show, ATRONIC will be presenting the very latest products including “Diversity”, ATRONIC’s new multigame product and a strong addition to its portfolio. “Diversity” features brand-new as well as top ranking ATRONIC games and unique game suites, allowing players to select their preferred game types and

volatility. “Magic 5’s” is the latest addition to ATRONIC‘s multi-level progressive links featuring no less than eight progressive levels. These can be won during the base game or free games with any five-of-a-kind win combination (requires playing max bet per line). The high number of progressive jackpot levels, easy-to-understand rules, and high progressive hit frequency sets this new linked gaming concept apart from the others! ATRONIC will also present a broad range of new core games available in a variety of dual screen cabinets. On the systems side, ATRONIC professionals will be on hand to present the entire range of its comprehensive systems solutions including CRYSTAL.net, the new evolution for casino management

floor networks, maximising revenues and streamlining casino operations. ATRONIC International Sales Director Jon Lancaster commented “ATRONIC has worked hard to develop and fine tune products specifically for the Asian markets. This year we will be showing the biggest range of proven performers that we have ever had and we continue to grow our footprint and reputation in the region” ATRONIC also takes the chance to introduce a new member to the Technical Service team. Based in Singapore, Lim Wei Hsiang is the company’s new Technical Support Engineer for the Asian markets. With his profound knowledge of ATRONIC gaming machines and the Asian gaming market Lim is covering the service and support for ATRONIC across Asia. JUNE 2010

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Bally showcases U-Spin Award-winning Cash Spin plus powerful new player marketing and communications technology BALLY Technologies will spotlight an extensive collection of games and systems products. Bally is presenting its latest and most advanced gaming products, including a full suite of video and mechanical-reel games as well as Bally’s most cutting edge systems and server-based gaming solutions. “We have selected a crosssection of the key games and systems that will take our valued customers in this expanding region to the next level of profitability,” said Gavin Isaacs, Bally’s Chief Operating Officer. “G2E Asia, the largest gaming industry gathering for the AsiaPacific region, gives us the opportunity to showcase some of our most exciting and profitgenerating products, many ny of which were developed specifically for this market.” ket.” In Bally’s expansive Games ames display, the star of this year’s

G2E Asia show is sure to be Bally’s breakthrough Cash Spin video slot with its patent-pending U-Spin gesture-control technology. U-Spin allows players to spin a virtual wheel fast or slow just as if it was an actual physical spinning wheel. Cash Spin is one of the premier games in Bally’s portfolio of new SpinNation spinning-wheel video and reel-spinning slots. “Based on our projections, Cash Spin is well on its way to becoming the most successful new gaming device ever developed in the 78year history of Bally Technologies,” said Cath Burns, Bally’s Vice President and General Manager of Asia-Pacific. “Demand for this game has been exceptional, and we’re very excited to bring this award-winning new game to the growing Asian gaming market. Its interactive style of play and bright spinning wheel delivers worldwide appeal.” Cash Spin also features Bally’s iReels technology, which

superimposes colorful animations and other special effects over actual mechanical reels. Additionally, iReels is touchenabled, creating another level of player interaction with the game. Another highlight in Bally’s stand is Hot Shot Progressive Cash Wheel. Already Bally’s most popular brand, Hot Shot Cash Wheel adds to the fun and excitement with its colorful spinning bonus wheel. Once in the Wheel Bonus everyone wins, as there are no losing wedges on the wheel, and the game features Bally’s patent-pending Game-inGame progressive bonus action. And the Hot Shot Progressive family of games continues to grow with the new Hot Shot Progressive 15-Reel video slot on the ALPHA Elite V20/20 upright cabinet. What makes this game unique is that it offers players an amazing 243 ways to win, thanks to its 3x5 symbol grid, rather than the traditional linear arrangement of reels. Another Bally standout that will be featured at G2E Asia is Fireball, a worldwide favorite in the Digital Tower Series. With its exciting topbox bonus animations of bursting fireballs, dramatic music, and special effects, complete with an eight-level progressive, Fireball gives slot players a remarkably exciting and unforgettable gaming experience. 77777 Jackpotª is another Digital Tower series game that is sure to generate a great deal of interest with its striking digitally animated ladder bonus top box progressive jackpot feature. Understanding that the number eight holds special significance in Asian culture, Bally will also feature several games with “eights,” which represent good fortune for Asian slot players. These games include Double Blazing 8s and Double Jackpot Triple Blazing 8s.

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FutureLogic highlights TITO The TableXchange revolutionizes casino table games THIS year at G2E Asia, attendees are encouraged to visit FutureLogic in stand 927 where the company will be showcasing the PromoNet couponing solution. This templatebased system helps casinos design and manage a wide range of promotional campaigns from the convenience of a workstation PC, turning ordinary slot tickets into colorful, eye-catching coupons. By directly linking promotional campaigns to specific player actions, activities or behavior, the printer becomes a multifunctional marketing tool. This technology allows casinos to automatically trigger a marketing campaign based on game play metrics,

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player tracking information, POS systems and redemption terminals. Another gamechanging peripheral to be exhibited at the show is the TableXchange printer/scanner, which effectively brings TITO gaming to table games. The TableXchange printer/scanner was developed based on FutureLogic’s player research on crossover players and how they moved from slot machines to table games, and vice versa. In order to do this, the player must go to the cashier cage and redeem their TITO ticket or chips for cash and then go to the table game or slot machine of choice. This may require some waiting in line before resuming play and the temptation

to leave with the cash. With the TableXchange printer/ scanner, the player simply gives a TITO voucher to the dealer to buy in. The TableXchange printer/ scanner then scans and displays the voucher value on the device’s LCD and touch-screens, allowing the player, dealer, and security operations to confirm the voucher amount. The player then receives chips and a TITO voucher for any cash balance. To cash out, the dealer simply collects and enters the value of the player’s chips on the alpha-numeric keypad. The TableXchange printer/scanner then prints a cashout voucher for the player. The TableXchange printer/ scanner revolutionizes casino table games by creating a bridge between slots and tables, helping casinos identify valuable crossover players, and by virtually eliminating the need to replenish chips at table games. It also has the ability to scan Player’s Club cards so that members can be rated and receive loyalty points at table games in the same way they can at slot machines. The TableXchange printer/ scanner can also be integrated with the PromoNet promotional couponing solution. Many casinos are now delivering promotional content to the player via TITO printers at slot machines, and this new device will allow them to do the same at table games. With non-gaming revenue becoming more important to casino resorts and complexes, linking reward programs across multiple leisure experiences, as well as casino floors, has become an important initiative for marketers.

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IGT showcases exciting slot games The top casino gaming products designed to improve the player and operator experience INTERNATIONAL Game Technology (IGT), a global leader in creating the games players love and network systems that improve the player experience, will display the latest products for the Asian Gaming market. IGT promises to thrill attendees with a long lineup of groundbreaking slot games and revolutionary casino system’s products. The hottest game around the globe is the Sex and the City slot, and players can’t get enough. At G2E Asia, IGT will showcase two versions of this game – MultiPLAY (four games on one machine, each with a different outcome) and the single-play version. IGT creates an immersive

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gaming experience with its new Center Stage Series. It’s an eyecatching, awe-inspiring platform, designed to deliver extra-large fun to players and big time flexibility to operators. Two versions are available: a 103-inch screen with five player stations and a 70-inch screen with four player stations. Much like a movie theatre, casinos install the platform (screens, seats and all) just once, and change out software for themes as they become available. At the event, the first run themes will include Wheel of Fortune Triple Spin and American Idol Video Slots. Joining the Wheel of Fortune family is Wheel of Fortune Triple Spin Video Slots. This Group Play game features IGT’s exclusive MultiPLAY interface with three 4x4 independent reel grids and MultiWay game play. The game features unique independent reels with a re-spin feature where four

like symbols in centre grid initiate a re-spin. Players will enjoy the 90-credit cost to cover all three games and 450-credit max bet. Exciting bonus action features awards from one to three bonus wheels plus a Mystery Slices bonus which awards random credits. Super Nova Blast Multi-Level Progressives deliver IGT’s first 3D group play bonus – bringing the game to life with animated symbols. An engaging bonus involves all eligible players and is timed to occur every four to six minute – keeping players’ anticipation high. Debuting at release are three base games: Abra Cash Dabra, Pterodactyl Triples and Ringmaster Riches 3D Slots. All three are available on each S MLD machine model so players can choose their favorite. The visitor can also play IGT’s new Top Dollar Reel MultiPLAY game and meet the dapper Bill Cash, who guides players through the game as a razzling, dazzling show host. The Top Dollar theme has been a favorite for a decade, and this 3D version takes the classic, arcade-style game to a new level of fun. It has the traditional Top Dollar “Take Offer, Try Again” proposition, and not one, but two reel games that spin simultaneously and stop with individual outcomes.

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Shuffle Master enhances Vegas Star G2E Asia to see improved product on stand 1101 AT this yearâ&#x20AC;&#x2122;s G2E Asia, Shuffle Master will feature several new enhancements to its popular Vegas Star product line. A fullyelectronic, state-of-the-art table game platform, Vegas Star makes it possible for casinos to offer popular table games like Blackjack, Baccarat, Sic Bo and Roulette in a fully-secure, scalable multi-terminal environment. During game play, players place their bets on individual betting terminals, and all game activity is displayed on a central plasma display that now features an attractive video dealer rather than an animated dealer.

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Vegas Star also offers casinos maximum flexibility in setting player wager amounts which makes it easy for operators to attract both low and high stakes players. The key enhancements Shuffle Master will display at G2E Asia are incorporated into the productâ&#x20AC;&#x2122;s newest game Grand Baccarat. Featuring the enticing and lucrative Grand Tie jackpot feature, Grand Baccarat enhances the popular game of Baccarat with incrementing jackpots. Best of all, Grand Baccarat does not alter the base Baccarat game rules or game play. To play, players place their bets on their individual touch screens, and once the betting countdown is completed, the video dealer will deal the Player and Banker hands.

To be eligible for the Mini or Major jackpot, players must make the Grand Tie bet prior to any cards being dealt. The more a player bets on the Grand Tie, the more gold prize cards he receives when the Grand Tie feature is triggered, and the more chances he has at winning a jackpot. Multiple jackpots can be won during each feature, and in addition to the new Grand Tie bet, the popular Dragon Bonus and Pairs baccarat side bets are also available. Grand Baccarat is available as part of a multi-terminal setup. Housed in the stylish and compact mojo cabinet, the game can accommodate up to 32 player stations per game and can be installed in a variety of configurations.

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Jumbo introduces Bingo to Macau AFTER successful slot product launch 2009 December, Jumbo has more to offer to the market. In G2E Asia, Jumbo will be showcasing more western themed slot games and also introduce “Bingo” game to Macau market.

According to Mr Liu, although many Chinese people are drawn by the familiarity of Chinesethemed games, “there are other Chinese people who look for Western brands and characters. If we are a machine supplier, we

cannot just appeal to one group. We need to appeal to as many as we can.” Having more international game themes could also open up new markets for Jumbo. “If you go to the Philippines or Cambodia, they are not really interested in Chinese games. There is a big US influence in the Philippines, where they are more familiar with American themes,” points out Mr. Liu. Jumbo now has over ten slot titles and a large team of developers working on new releases. JUNE 2010

best practices

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RICARDO ANDORINHO *

Inside-out!

Most of us have enormous difficulty discussing our goals; knowing what we actually want, what we have been doing lately to achieve it, or simply why we haven’t been working consistently towards a particular goal. These are questions or sometimes answers that we all find hard to elaborate on. When character is defined as the ability to carry out decisions after the emotion of making such decisions has past, lack of character or personality “issues” are seen as the most common obstacles to achieving goals. The best way to get at what it takes to achieve what you want is to have an inside-out perspective. So, before you start collecting private victories, you need to know what your strengths and weaknesses are and at which point in life you are. Then you can strategically align your skills, knowledge and desires to fight particular battles and/or achieve particular goals. Adapted from work by American author and speaker,

Don Hutson, we offer a “map” for your inner personal quest. This map or self-assessment exercise takes about 5 to 10 minutes of your time. Check it out and take the advice below. 1. Give a mark for your performance in each of the areas identified on the diagram (lowest 0, highest 10). 2. Then, imagine where you would like to be in each of the areas identified. 3. On a blank piece of paper, write down at least 3 personal goals related to each of the areas identified. 4. Think about what is holding you back. 5. Write a plan to achieve each of your goals. 6. Prioritise your goals. 7. Work consistently towards your goals. It’s a fact, that once we identify our desires, goals, dreams and battles, and fight to be responsible for our own acts, we become independent! As you start winning fights, getting the incredible taste of success and celebrating your private victories, you will start witnessing a permanent, dramatic and positive change in your life! Independence is not supreme, but it is definitely a major achievement, and the beginning of almost everyone’s journey of personal growth. So, go on, start developing your own character from inside and we assure you that soon enough the results * Business Developer | MB Intelligence Consultancy Limited (“MBi”) will come.

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Tourism

Mandarin Oriental to open this month The new Mandarin Oriental, Macau will open at the One Central complex by late this month. Besides accommodation, the hotel will feature an award-winning spa, a wide range of dining options and a fitness centre with an outdoor temperature-controlled swimming pool. The hotel is offering an opening package including a complimentary night’s stay or credits for spa and dining facilities. The promotion is valid from 30 June to 30 September 2010.

More visitors...

Stronger MICE...

Total visitor arrivals in April 2010 increased by 13.1 percent year-on-year to 2.1 million. Same-day visitors accounted for 51.0 percent of the total visitor arrivals, with 529,445 coming from the mainland, official data shows. Visitors from the mainland grew by 17.3 percent year-on-year to 1,052,610 (49.8 percent of total visitor arrivals), with 390,031 travelling to Macau under the Individual Visit Scheme, up by 13.9 percent from April 2009. Visitors from Hong Kong and Japan rose by 13.4 percent and 25.0 percent, respectively. Besides, visitors from the Republic of Korea and India also registered notable increases. Visitor arrivals totalled 8.3 million in the first four months of 2010, up by 12.4 percent year-on-year.

Macau hosted 397 MICE (Meetings, Incentives, Conventions & Exhibitions) in the first quarter of 2010, up by 4 percent year-on-year. A total of 10 exhibitions were held in the first quarter of 2010, down by 6 year-on-year, with the average duration dropping by 0.3 day to 3.6 days and the number of attendees decreasing notably by 52 percent to 56,045. Meanwhile, number of meetings and conferences rose by 22 year-on-year to 387; the average duration stood at 2.3 days, up by 0.3 day, and the number of participants increased by 2 percent to 36,692. The majority of MICE events focused on commerce, trade and management, 153, travel and tourism, 47 and banking and finance, 40, up by 49, 57 and 48 percent respectively year-on-year. Most were corporate with 184, while associations held 94 meetings and government meetings numbered 45.

...who spend more

Per-capita spending by visitors – excluding that on gaming – increased by 9 percent year-on-year to MOP1,783 in the first quarter of 2010, according to official data. Spending by mainland visitors took the lead, with MOP2,826. Percapita spending of those from Southeast Asia, Hong Kong, and Taiwan amounted to MOP1,727, MOP1,135 and MOP1,056 respectively. Compared with the first quarter of 2009, per-capita spending of tourists rose by 24 percent to MOP2,880 and that of same-day visitors went up by 43 percent to MOP703. Per-capita shopping spending grew by 35 percent to MOP886, with expenses mainly on jewellery/ watches -21 percent -, local food products – 21 percent and clothing – 19 percent.

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...and bigger subsidies The Macau Government Tourist Office (MGTO) has launched the second phase of its Strategic MICE Market Stimulation Program. The scheme provides financial subsidies and other support for qualifying business events confirmed before end-2010, CEI Asia reported. There is no date limit on when the event must take place. Since its introduction in May 2009, the scheme has supported 67 meetings and conventions, 36 exhibitions and 62 incentive programmes with a total of US$6.4 million in funding. MGTO has also received 13 applications for events to be held between 2011 and 2014.

S Y A D EY D N SE L O A O M H OD RC HE E T O U P GG AVEE TRUT BIG N H A ST ACK YOU COM THA U Y MING B HEN AMS FOR B L W E SHEE COMCARS R DRE DVIC AR EAM YOU OD A DR MAKE W GO TO ERVIE INT

BREAKDOWN BY THE NUMBERS

THE FIGURES BEHIND SOME CARS FACTS

Having a car is a necessity. At least for most of us. There are some people, for whom the use of public transportation is simply out of the question. They need a car to go places. Anywhere. And even if there’s nowhere to go, they’ll need a car anyway.

1885

the year Karl Benz built the first vehicle to use a internal combustion engine

1000

the number of petroldriven cars in 1885

1,500,000,000

the number of cars on Earth in the next 30 years if present trends continue

400,000,000

the number of cars on the roads all over the world in 2000

750,000,000

the number of motor vehicles in the world today

the percentage of hybrid cars in the world

We are definitely not in a position to judge them, especially if you have the money to spend on some of the beauties like the ones we are featuring in this fully car-dedicated issue. Whether you’re buying a new car, cheap car, expensive car, looking for a lease transfer, shopping for cheap auto insurance, buying a car is always a major task because it’s one of our biggest financial investments we make. In the process of doing so, there are pitfalls that we should be aware of. Like being ripped-off or getting a lemon so “buyers beware” should be your motto whenever you look for a new car purchase or a second hand vehicle. In this issue of Essential we ask some basic questions about this theme to a professional salesman in Macau. Macau is probably not the most suitable place to sit and drive for hours, unless you like driving in a merry-go-around style, but still it’s impossible for cars lovers not to act on that love and passion. This month, we fall in love with some of the most trendy cars on the market, not only for their looks, but most of all for their performance. In fact, this time we go a little further when explaining the performance of cars, whether it’s the engine and the technical specifications or your own performance inside of a car. If you know what we mean...

City driving

Highway driving H

City driving means there is a lot of stop and go. Highway driving means no stopping, just go. Traffic jams are typically bad for your vehicle because the constant slowing down and speeding up puts a lot of pressure on your brakes to perform, and over time, this motion will wear out your brakes entirely. City driving puts a lot more wear and tear on your vehicle because there are a lot more things to react to such as pedestrians, animals, and of course- other drivers.

Highway driving is generally better for your car because you can typically drive for long stretches at a time without abreak in traffic. Obviously, the less you have to stop,the less you’ll use your brakes, which means that you’ll preserve them longer. Of course, you still run the risk of getting into a car accident and because the rate of speed at which you are travelling at is typically higher than that of city driving, you are also at more of a risk of getting into a serious accident that could cause you to put sudden wear on your vehicle.

It’s funny to watch people singing all alone inside Sometimes it looks there’s no soul on earth of their cars while you’re stuck in a traffic jam. but you...and that can be boring! Driving is boring when you have traffic lights and signs. Driving is better if you can avoid stoplights and traffic. You’re never there in five minutes only! Always on time!

TEN COMMANDMENTS FOR THE CAR COLLECTOR 1 Thou shalt not store thy cars out-of-doors, except for thy wife’s modern iron.

6 Thou shalt not allow thy daughters nor thy sons to get married during the holy days of Hershey.

2 Thou shalt not covet thy neighbour’s car, nor his garage, nor his battery charger.

7 Thou shalt not deceive thy wife into thinking that thee is taking her for a romantic Sunday drive when, indeed, thou art going out to look at another car.

3 Thou shalt not love thy cars more than thy wife; as much, but not more. 4 Thou shalt not read thy Hemmings on company time, lest thy employer make it impossible to continue thy car payments. 5 Thou shalt not despise thy neighbor’s Edsel, nor his DeSoto, nor even his 1947 Plymouth.

8 Thou shalt not tell thy spouse the entire cost of thy latest restoration, at least not all at the same time. 9 Thou shalt not promise thy wife a new addition to the house and then use it to store cars; thou shalt not store cars in the attic. 10

Thou shalt not buy thy wife a floor jack for Christmas! 123

FEATURE

Good old days are coming back

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VRUM VRUM VRUM...THATâ&#x20AC;&#x2122;S THE ONLY COMMENT THAT CROSSES OUR MINDS WHEN WE LOOK AT THESE PICS! The 2010 Ford Mustang Shelby GT-500 Coupe sports car production was a factory-sponsored program by Ford to initially compete with the Corvette. Ford has introduced a heavily revised version of its Shelby GT500 rangetopper for its latest model year. For the latest generation, the SVT and Shelby-engineered muscle coupe gets an all-aluminum version of its existing 5.4-liter V8 for more performance and better efficiency, along with a fresh new look. This new engine is good for a 102 lb weight decrease, as well as 10 horsepower bump over the outgoing model -- putting total output at 550 hp and 510 lb-ft. of torque. Likely the most significant option change for the GT500 is the SVT Performance Package, giving the GT500 a track-ready performance pack from the factory. This package includes specially developed Goodyear Eagle F1 SuperCar G: 2 tires, a higher rear axle ratio, stiffer springs, lighter wheels and cosmetic changes for both the coupe and convertible. Ford attributes a 3.0-second lap time saving over the outgoing coupe on the 2.3-mile test track. Another major change for the new Shelby is the option for a glass roof coupe - the same unit available on the newest model standard Mustang coupes. The Shelby GT500 also now comes with standard HID headlamps, optional MyKey technology, an integrated spotter mirror and fold-down rear headrests for maximum rearward visibility. And if you ask us, weâ&#x20AC;&#x2122;re just simply head over heels with this one.

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CHECK CARS

NOT SURE ABOUT WHICH ONE TO PICK? DON’T WORRY...WE’LL GIVE YOU A HELPING HAND!

New face

Get out of the ordinary

Mazda’s acclaimed mid-size car has been refined and evolved. The Mazda 6 has attracted a wide range of customers with its sporty styling and exceptional driving performance. The enhancements for the freshened Mazda 6 are based on the ZoomZoom evolution development concept, and include improvements to its environmental and safety attributes, driving performance, interior and exterior design, and quality levels. The 2.0-liter engine models, available in both the Sedan and Sport Wagon body types, have been updated with Mazda’s direct injection MZR 2.0L DISI*1 petrol engine. The exterior of the face-lifted 6 adopts the new Mazda family face with a five-point front grille and other spirited design elements that enhance its sportiness. Both the 17-inch and 18-inch aluminum wheels have new designs, and the range of eight exterior body colors has been augmented with new tints. The brand new colors are Clear Water Blue Metallic and Midnight Bronze Mica, which expresses a premium identity.

“Sick of seeing the same old sedans year after year?” Hyundai asks. The all-new Hyundai Sonata promises to break up the monotony of the mid-size market with ‘bold-not-boring’ styling and a new fuel-efficient engine. Hyundai designers and engineers in the Southern California Design Center spent four years developing the sleek, coupe-like design of the all-new Sonata, with a unique point of view along the elegant curves and arcs, sculpted chrome grill and a raked roofline that gives it a fluid-like feel even when it’s standing still. At the heart of the new Sonata is the new fuel-efficient engine that does not sacrifice performance. Sonata’s new 4 cylinder 2.4L GDI engine appeals to car lovers and nature lovers with a perfect combination of high power output and fuel efficiency. Besides, it still offers an impressive 200 horsepower. One of the ways it does so is by being the first vehicle in its class with standard Gasoline Direct Injection (GDI) technology.

Le plus beau Around 100,000 readers of AUTO BILD magazine have voted the Mercedes-Benz SLS AMG Germany’s most attractive car. The supersports car received the most votes of any newly launched model. Second place in the overall rating was taken by the new MercedesBenz E-Class Cabriolet. The Mercedes-Benz F 800 Style emerged as the winner in the “Studies & Concept Cars” category. For the fifth time, Germany’s largest automobile publication AUTO BILD asked its readers to vote for the most attractive cars from a choice of 103 new products in five categories. Mercedes-Benz Chief Designer Prof. Gorden Wagener said, “Our vehicles are self-assured examples of refined sportiness. The SLS AMG, the E-Class Cabriolet and the F 800 Style exhibit the unmistakable style of Mercedes-Benz design, and set design trends for the future.” Mercedes-Benz also led the field in last year’s vote: in the AUTO BILDDesign Award 2009, the readers gave first place to the E-Class Saloon as Germany’s most attractive car, while the E-Class Coupé was the winner in its category.

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The new star in town When you think of luxury executive saloons, one car always comes to mind, the BMW 5-series. A class leader since its inception, the 5-series remains a crucial car to BMW. With the previous E60 5-series introduced back in 2004, BMW has launched the sixth-generation model in 2010. The front-end features a more upright kidney grille in order to comply with stronger pedestrian protection laws. BMW’s characteristic interaction between convex and concave shapes are emphasized. The new 5-series is built off an entirely new chassis, with double wishbone suspension in the front, like on the new X5. The move is designed to give better control and road grip around corners, according to the chassis engineers. With the aid of the extremely fast Flex-Ray automotive network communications protocol, the adaptive shock absorbers are set to become more effective, as will active steering. BMW has also updated its iDrive system for the new 5-series, making life a little easier with the addition of yet another pair of programmable buttons. Those that think the standard 5-series isn’t sporty enough will have to wait a few more years until the new M5 turns up with its V10 motor and more power than the 507hp offered in today’s edition. The standard version is fitted with an 8-speed automatic transmission.

A different point of view There was a time when you would have associated Buick with something like your old man’s car. Something an old-fashioned doctor might have. What’s old is new again, and new Buicks will easily lure in new blood with this Buick LaCrosse. The new Buick LaCrosse 2010 is a dramatic departure in both style and technology. It may not be a sports sedan, but it’s a very competent sedan that’s out to change our perception of Buick from something ‘old daddy’ owned, to something you yourself might want to own. At the Detroit Auto Show critics lauded its global approach to styling and design. Having been jointly developed by GM in China, Europe and North America, the Buick Lacrosse is attractive. The car feels and looks classy enough to be a Cadillac. The two-tone interior is pleasantly sculpted. The steering has a good balance of feel, weighting and precision. The driver’s controls give excellent feedback, making the Buick Lacrosse enjoyable to bend into a corner.

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DREAM CARS

DREAM A LITTLE DREAM OF ALL OF THESE IF YOU DON’T HAVE THE BANK ACCOUNT TO SUIT THEM...

The stunning result of taking a very different road

Luxury defies preconceptions

“You’ve never seen a car like this before. Because no one has ever thought this way about a car before. The new XJ reflects a vision that defies preconceptions and transforms the idea of luxury”, Jaguar defends. And we agree. Seen in its natural habitat, the XJ is truly dramatic. It looks assertive, confident and quite unlike any rival, especially a sober-suited German one. The drama continues inside, helped by the light from the glass roof and the sort of sumptuous materials you would find in a Rolls-Royce or a Bentley. Now see the instruments, high-resolution images on a screen rather than the chrome-and-glass dials they appear to be. Then there’s the central screen with its two layers of differently oriented pixels, so the driver can see the usual information while the front passenger simultaneously watches TV or a DVD. Underneath all this is an aluminium structure derived from the previous XJ, enabling this hefty car to weigh much the same as the smaller, but steel, XF. The engines mirror those of the XF - a 3.0-litre, V6 diesel with twin sequential turbos and 275bhp (from £53,755), a 5.0-litre, 385bhp V8 with direct injection, and a supercharged version of that with 510bhp for the top, £87,455 Supersport model. All have six-speed ZF automatic transmissions with paddle-shifters.

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Central to the notion of a Jaguar is refined progress with the promise of potency, and the XJ does it brilliantly. There’s a sense of precise, delicate connectedness with the road and a driverinvolving, mass-defying agility. The miraculous part is that this is combined with the suppleness and grace of motion that has long been a Jaguar speciality. As expected, the engines are magnificent. The latest turbodiesel with its 443lb/ft of torque hurls the XJ along with extraordinary nonchalance. The supercharged Supersport, however, is a truly joy-giving machine. It still rides absorbently over bumps and can play the luxury car with its engine lazily burbling, but one squeeze of the accelerator brings a deep, potent throb and a torrent of overtaking energy. This is a very rapid Jaguar, able to reach 100 km/h in 4.9 seconds, and here you can really enjoy manual paddle-shifts and the XJ’s remarkable dynamics. Pressing the chequered-flag button loosens the stability control and firms the dampers for a yet more engaging drive, but even then the ride never descends into turbulence. So that’s the new XJ, a car which feels special in the way its German rivals do not. It turns heads and it’s British. Even in today’s globalised world, that last part is especially pleasing.

Too Porsche Too rough, too noisy, too harsh, and too low. Its clutch engagement is stupendously stiff and its gigantic six-piston front brakes hurl you at the windshield with every slight pedal tap. Let’s not forget about that 3.8-liter flat-six. The entire car is raw...organic even. That’s exactly why we love it! The 2010 Porsche 911 GT3 is not fun when perusing boring urban blocks. It isn’t comfortable when entering parking lots with the slightest of curbs, even with the available front axle lift bringing the nose up nearly 1.2-inches. Below 4000 rpms it’s taxing to shift the extra-stiff clutch with its bicep-building lever. PASM (Porsche Active Suspension Management) in its standard mode transmits each road imperfection with teeth chattering effect. Don’t even think about switching it into “Sports Mode” when out in the real world. The car lives at the limits of civility, barely streetable in between track sessions or secluded back road runs. This is a German thoroughbred born of countless race wins. It wants to run and loves being pushed. We mentioned it was “organic.” In other words, it features no turbo or supercharger additives to motivate it to abnormally high speeds.

More edgy, more boxy and arriving to Macau Judging by the sneak peak Mercedes itself gave reporters, it seems the German company is positioning its first compact SUV as more pug than poodle. The GLK-Class favours a squared-off and muscled-up approach to styling, both inside and out. The 2010 Mercedes-Benz GLK arrives as a boldly styled rival for the BMW X3 and Land Rover LR2, as well as the 2008 Infiniti EX35 and 2009 Audi Q5. With square-cut lines and a boxy nose, it is more in the spirit of Mercedes’ GL-Class full-size SUV or the LR3, rather than the more flowing contours of the Mercedes M-Class midsize SUV or such premium compact SUV newcomers as the EX35. It doesn’t look so much smaller than the M-Class, even though it is smaller, “because of the boxy, edgy design language”, explains the GLK design project management. Mercedes said the prototype’s dashboard was in near-final form. It consists of a sporty assembly of main gauges set before the driver. Jutting forms separate a series of blocky modules that house groupings of controls. The dashtop on the prototype was black and the instrument panel was of light-toned grained material set off by aluminum trim. Macau will welcome the GLK this month.

Confidence on the road The face-lifted versions of the Maybach saloons are even more self-confident and effortlessly superior, their charisma even more striking. The exceptional status they enjoy finds its main emphasis in the new dominant chrome radiator grille, which is meticulously produced in two different variants. Other new highlights include the bonnet with a shaped edge, the trim on the front bumper with daytime driving lights featuring LED technology, high-quality, dark red tail lights and a new, exclusively developed paint and stylish wheels. In future, those purchasing a Maybach 57 and 57 S will also be able to opt for the

rear reclining seat from the Maybach 62 models. New items are available on request, among them seat piping which is handbraided or refined with CRYSTALLIZED™ Swarovski Elements, an exquisite flacon perfume atomiser and a WLAN router for wireless internet access. As an option, a 19-inch cinema screen and an overview camera for the rear passengers can be installed in the rear of the Maybach 62 and 62 S models. The output of the 12-cylinder engine in the Maybach 57 S and 62 S has been increased to 463 kW (630 hp) but the pollutant emissions of all models have still been cut.

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INTERVIEW

Archie Keswick

is the General Manager of Zung Fu Motors Limited, a company representing Mercedes-Benz and smart in Macau. With previous professional experience with brands such as Porsche and Mercedes-Benz in Europe, Mr Keswick has a true passion for cars. Buying a car is a big deal no matter where you are in the world. We ask Mr Keswick to offer Macau drivers some small tips about driving and buying in Macau.

Should I buy or should I sell?

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SEX & CARS

Can you give Essential a profile of the typical Macau driver? On average, Macanese drivers are relatively dangerous on the road. Due to the fact that speed limits on the city roads and on the bridges are different, I would have to say that driving on the bridges is very dangerous. On the roads is not as dangerous, but still there’s a lot of pressure and stress especially from the large number of motorbikes. And what about the car buyer’s profile in Macau? For the Macau buyer the most important thing is the exterior, the aesthetics of the car. Since Macau is a very small city and the distances are very short, performance is not as important. Also, the majority of drivers love the aesthetics of the car to be more sporty, that’s why there is such a big investment in tuning cars in Macau. Reliability is also one of the sales keys in Macau. What makes a car an Asian market sales star? In terms of colour, I would say that darker colours are the most chosen. Black, dark metal grey and other solid colours are the major choice. The status linked to the car brand is also quite important for the Asian car market. Nevertheless, I would have to say that performance and reliability are key points for a car’s sales success. Concerning the Mercedes-Benz E Class and S Class, they are the most successful ones in Asia and specifically in Macau.

The Sexiest Cars in Town Having sex in cars can be an interesting diversion from the bedroom’s discreet confines. You only need a little imagination, your accessories of choice and one of our ideal cars to have sex in. You have to experiment to find the best proverbial and literal ‘fit’ for you and your partner and the same goes for a carnal car. Bigger is not necessarily better; it’s how you use what you have.

Honda Fit Cars with ‘fit’ in their names deserve nods as cars to have sex in, and Honda’s comes with a Magic Seat. For Fit virgins, this feature is sadly not as erotic as it sounds, but where it doesn’t satisfy proclivities, it compensates in utility that at least enables proclivities. In between rounds, when you’re doing nothing but driving, the second-generation Fit is anything but sloppy seconds. However, its ergonomics and on-road character keep it a standout among its peers.

Lexus LS 460 L You would imagine sex in a Lexus to be like the driving experience: passionless and very quiet. The only reason the LS 460 L is among the best cars to have sex in, is the available Executive Class Seating’s reclining and massaging right rear seat, combined with the optional DVD system.

What do you mostly prefer and value in a car? Technology and innovation from the car brand is actually very important. Personally, I like speed, fast and rally cars. This means that performance and sound systems are some of the things that I appreciate. Again, I would also choose reliability.

When buying a car, what should the buyer pay attention to? Give us some tips to avoid a bad decision. The truth is reliability is what a customer should look for when buying a car. The dealership is very important, but after the car is sold to the customer there must be post and after-sales service that not only ensures the client, but gives them the notion that they are being continuously taken care off. In this perspective, the car’s maintenance is very important.

Ford Mustang Convertible Of all the cars to have sex in, a Mustang is not the most commodious. Making it a fait accompli demands you be under four-feet tall, or an exhibitionist with a convertible. That said, the Mustang has a raw sexual swagger that the Chevy Camaro and Dodge Challenger lack. And you can’t compensate for that quality.

Volkswagen Jetta SportWagen TDI Even when you’re dressed and behaving, the Jetta TDI series is the kind of green car you can get behind. You can actually have fun at the wheel. The SportWagen TDI spreads the joy further, because its generous sex space condones a different kind of tree hugging.

Bentley Continental Flying Spur Speed This is the ultimate car to have sex in. It’s like a W12powered, W hotel suite. Minimal outside noise will be drowned out by her vocal approval and the throbbing 1,100-Watt Naim audio system, so you’ll be hard-pressed to isolate the source of all the velocity.

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NEXT CORNER

CARS AND WOMEN. ALWAYS A FASHION COMBINATION!

Smartly setting the bar Environmentally conscience and sustainably designed was the mojo for the new smart collection trendy products. To meet the varied demands of city life the collection comprises the pure, pulse, passion and ecological lines â&#x20AC;&#x201C; perfect for a pulsating urban lifestyle! Besides, they also reflect the basic values of the successful smart fortwo â&#x20AC;&#x201C; the trendsetter for urban mobility. The ecological line stands for environmentally friendly products and some of them contain bamboo fibre. The passion line, especially for women, features checked patterns, skyline prints and yellow accents. The pulse line for men focuses on the colours brown and grey and features orange contrasts. The pure line offers products with a clear and sporty design for both men and women. All items have been carefully designed with a fresh look and affordable prices. Products for men include the pure rain jacket (MOP500), the pulse outdoor jacket (MOP1000) or the eggshell limited T-shirt (MOP350). Highlights for women include the passion city jacket (MOP800) and the ecological bodywarmer (MOP800).

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Melissa São Paulo

Opening Ceremony New York

Made in smart colette and smart have created a special urban car brand that consists of several items. colette, which opened in 1997 on Rue Saint-Honoré in the sophisticated 1st arrondissement of Paris, is not like a conventional shop. colette doesn’t just sell products from well-known brands: one of the things that make colette unique is its mix of products from established names and young designers and artists. The colette collection represents a continuation of smart’s activities in the field of urban creativity. For this new adventure, colette selected five designer labels, from Paris, New York City, Berlin and the new smart markets of Brazil and Denmark, and asked them to design an exclusive product for smart. The designers took as their inspiration the themes of urban mobility, design and sustainability – all key values behind the smart brand. All of the products are made from recyclable – or, in some cases, even recycled – materials, and are each produced in a limited edition of just 150.The colette and smart collection can be ordered now at colette, Paris, and online at www.colette.fr.

This travel tote bag is ideal for when you’re zipping around the city in your smart. It’s made from organic cotton and features some clever tools for out and about, like a bottle opener and a tape measure – and they’re all made from recycled materials. (Cost: MOP400)

The Brazilian shoe label is known for its unique shoes made from recyclable plastic. Now Melissa has come up with two special colour editions for the colette and smart collection: Melissa’s first ever shoes for men – the “Aranha” – based on the footwear of fishermen in the south of France – in matt grey, and the ballet flat “Campana Corallo” in a smart silver colour, for women. (Cost: MOP450)

Lala Berlin Berlin Lala Berlin’s large square scarf made from a mixture of organic cotton and silk with a hand-painted motif is typical of the label’s designs. When designing the scarf for the collection Lala Berlin was thinking of paradise, animals, nature, and the possibilities we have for positively influencing our urban jungle. (Cost: MOP1800)

Wood Wood Copenhagen For the colette and smart collection this danish t-shirt is made from organic cotton and is about ‘green driving’. (Cost: MOP500)

Andrea Crews Paris The Paris-based fashion collective Andrea Crews, founded by artist and designer Maroussia Rebecq, produces fashion items made exclusively from second-hand products. The label’s smart accessories are just as diverse as the urban culture that inspired them: wear them as a necklace, put them on your key ring or hang them on your rear-view mirror for more glamour in your smart. (Cost: MOP800)

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SHOW OFF

IT’S NOT ALL ABOUT FOUR WHEELERS, IT’S ALSO ABOUT RARE CLASSY ITEMS!

An award for keeping up with Time

Ipad features Mercedes-Benz The Mercedes-Benz Museum is one of the first museums in the world to make use of the iPad from the moment of its commercial release. As part of the current special exhibition on super sports cars, the “Mercedes-Benz Sports Cars” iPhone application has been optimised into a universal version for the iPad, and a lounge containing iPads has been set up in the exhibition hall. Visitors have been able to test out the tablet device using this app since the end of April, enabling them to experience the exhibition interactively. Other available iPhone applications have also been adapted in terms of their size and resolution to make them suitable for the new tablet device. These include the “SLS AMG HD App”, which allows you to go for a virtual drive in the new SLS AMG super sports car, and also the forthcoming car card games “Mercedes-Benz Quartet” and “Mercedes-Benz Silver Arrow”, featuring 64 original racing cars spanning 75 years of motor racing history. The new “Star Helper” app from Mercedes-Benz Bank, available on the App Store since the beginning of May, was developed directly as an iPadcompatible version. As a mobile first-aid app for use when damage occurs to a vehicle, it provides important tips in the event of an accident, helps with reporting damage and also has additional practical functions such as a car park finder and fine calculator.

Dad, I got a BMW! The kids can’t wait to get behind the wheel: a real BMW, with characteristic BMW design and the same state-of-the-art technology that has made the Bayerisches Motor Werk famous the world over. The blue-and-white enamel BMW badge stands proudly on the bonnet and boot. It also includes special, wide racing tyres and a built-in horn. Suitable for children from 1 to 3 years old. Better start soon with good habits!

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The flyback chronograph P’6920 Rattrapante Limited Edition from the luxury brand Porsche Design has just received a sought-after award at the international Red Dot Award Product Design 2010 competition. The P’6920 has been honoured in the category “watches and jewellery” with the “red dot” seal, recognised around the world for high design quality. The awards are handed out each year by an international jury of well-known design experts. “Porsche Design focuses on technically inspired products with a timeless, functional and purist design”, said Dr. Juergen Gessler, CEO of the Porsche Design Group. “We do not follow fashionable trends, instead we offer our customers longlasting products which are created to be lifelong companions. Trends come and go – design endures. Our products do without bells and whistles. They are always credible and genuine. Since the foundation of the brand, we have already won more than 130 national and international awards and we regard this as our duty.” The Porsche Design P’6920 Rattrapante Limited Edition is a mechanical flyback chronograph, which is available in a limited edition of 200 watches in the titanium version. The chronometer allows the user to precisely measure and display intermediate times as often as required. The Rattrapante has a striking 45 millimetre casing which is made of titanium, a metal known for its light weight and resistance to corrosion. The casing gets its black surface thanks to PVD technology: this vacuumbased process causes a matt black layer of metal nitrides to condense, protecting the watch from external influences. The sapphire glass back provides a view of the Valjoux 7750 automatic mechanism with Porsche Design rotor system.

So red! So Ferrari! If you’re a “tiffosi” like we are, you can’t miss this one. This Ferrari Scuderia helmet is just impossible not to want. And maybe we’re trying to focus all of your attention on the four wheels, but we must confess that after seeing this one we’re considering a two wheeler!

Looking through her eyes Your list of personal attributes might not include “blonde, 6’ 2” and meanwith-a-backhand”. There might not be a Wimbledon trophy with your name on it. You might not even be Russian. But that doesn’t mean you can’t at least look like – kind of – the person who has all of those qualities. To do so, you should probably start with the Maria Sharapova Sunglass Collection by TAG Heuer Eyewear. Designed by the Grand Slam winner herself, the collection includes aviator frames in motorsports-grade stainless steel, or thick, hand-polished, black acetate large-format frames. The latter variety is available in several trims: black with grey or gradated lenses; ivory frame with blue grey lenses; tortoiseshell with gradient brown lenses; and dark plum with gradient pink lenses. And so that there will be no doubt, her autograph is discreetly laseretched into the ultra light, shatter-resistant, UVA- and UVB-protected lenses.

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Next month look for Fine Dining Grand Canal Shoppes, The Venetian Macao 5cm Abiste agnès b. Aigle Aimer Alqvimia Anteprima Apothecary Armani Exchange Arté Madrid Artini Ashworth Autore b+ab Bauhaus Belle Blancpain Blush Boucheron Boutique di Gondola Breil Brooks Brothers Butani BVLGARI Canudilo Caran d’Ache Carat Carl F. Bucherer Century Chai CHARRIOL Chevignon Choi Wai Jewellery Chopard Cirque du Soleil Boutique City Chain CK Calvin Klein Clarins Club Monaco Coach Corona Crocodile Damiani Davidoff Deicae Demandor Derain DG Lifestyle Store Diesel Dilys’ Don Gilato Dooney & Bourke Ecco Edelweiss Jewellery Elle Jewellery Elov Emphasis Jewellery Emporio Armani Emporio di Gondola Enzo EQ:IQ Expressions Fabio Caviglia Fables Fancl Fila Fiorucci Florsheim Folli Follie Fossil Francesco Biasia Franck Muller French Connection Furla Geox; Joy & Peace girls talk Giviea Glashütte Original Godiva Göessele Grossé Guess Accessory Guess Jeans H&B Medicine Shop Hatta Fine Jewelry Hearts On Fire Herborist Hogan Home of Swallows Hugo Boss Orange Label i.t innée

2611 2629 2615 2419 2628a 2606 2618 1036b 2442a 2623c 2015 2323 2643 2312 2428 2108 2706 2642 2007a 2301, 2660 2610 2711 2523 2006 2705 1001a 2400 2207 2402 2646 2402c 2432 2118a 2010 1044 2019a 2622a 2625a 2446 2009 2212a 2023a 1013a 1001/ 2623b 2107 2105 1019 2201 2632 2109 K1 2616 2025 1020a K3 2207a 2020 2700 2660 2115 2612 2103 1008 2300a 2635 2401 2111 2603 2407 2413 2612b 2012 2440 2628 2641 2302c K5 2706 2640a 2627 2631 2601 2429 2120a 1013 2008 K6 2510 2201a 2031a 2328 2636

Izod Izzue Jaquet Droz JC Versace Jean Scott Jipi Japa Just Gold Kaltendin Kego Kilara & Ceu Killah Lacoste Lancel Laneige Le Saunda Levi’s Links of London LLadró L’Occitane Luisa Cerano Luk Fook Jewellery Lush M Missoni Malo Clinic & Spa Manchester United Mango Marisfrolg Marjorie Bertagne Marlboro Classics Massimo Dutti Maud Frizon Paris Max&Co. Mercato Michel René Michele Mikimoto Millie’s Mirabell Miss Sixty Mocca Moiselle Montagut Montblanc Moreline Murano Murphy & Nye NaRaYa Natural Beauty Mix Nautica Next Nike Nine West Normana O’Che 1867 Omega Optica Boutique Optica Fashion Optical 88 Osim Oto Outdoor Fashion Passion Play Patchi Paul & Shark Piaget Piquadro Promod Q’ggle Rado Raffles Rayure Replay Rich Jade Richard Mille Rimowa Rockport S. Culture S.T. Dupont Samsonite Shiseido Sisley Sisley Paris Soft & Intimate Sparkling Color ST GE Staccato Stefanel Stella Luna Stone Market Sulwhasoo Swarovski Swatch Tasaki Thomas Sabo Tie Rack / Bric’s

2423 2613 2523b 2001 2433 2102a 2113 2017a 2402a 2306 2306a 2508a/ 2403 2701 2409 2210a 2425 2608a 2013c 2608 2622 2018 2636a 2630 3015 2215 2321 2619 2648 2509 2442 2650 2623 2508 2703 2621 2011 2405 2658 2438 2322 2607 2525a 2002 2639 2652 2702 2212 2128 2709 2211 2432a 2605 1020 2426c 2003a 1010 2005a 2019 2106 2120 2523a 2300b 2111a 2007 2013 2023b 2316 2216 2006a 2119b 2606a 2427 2117 1002 2708 2203 2300 1022 2527a 2017 2310 2630a 2527 K9 2612a 2319a 2421 2026 2402b 2617 2415 2426a 2101 2426b 2435

Tiffany & Co. TISSOT Tommy Hilfiger Tonino Lamborghini Tourneau Toywatch Triple Five Soul Triumph and Hom TSL Tumi U-Boat United Colors of Benetton Valente Venilla Suite Verri Vertu Vilebrequin What For Wolford Y Nan Yes Zara Zydo

2003 2411 2710 2646a 1003 2417 2436 2220 2022 2707 2426 2308 1021 2600 2703a 2006b 2623a 2205 2626 2625 2023 2313 2013b

DFS Galleria, The Four Seasons

Armani Bally Burberry Cartier Celine Chanel Chaumet Chloe Chopard Clinique Debeers Dior Dior (Beauty Zone) Dunhill Estee Lauder Fendi Folli Follie Gucci Hermes IWC Jurlique Kiehl’s The City of Dreams Lancome L’Occitane Alfred Dunhill Level 1, The Boulevard Loewe Level 1, The Boulevard Bally Louis Vuitton Level 1, The Boulevard Burberry Omega Level 2, The Boulevard Cartier Prada Level 2, The Boulevard Chopard Ralph Lauren Level 2, The Boulevard Chow Tai Fook Salvatore Ferragamo Level 1, The Boulevard Coach Shiseido Level 2, The Boulevard Hublot Swarovski Level 1, The Boulevard Hugo Boss Tag Heuer Level 1 and 2, The Boulevard Tod’s i TO i Level 1, The Boulevard Insider Tumi Level 2, The Boulevard IWC Vacheron Constatin Level 1, The Boulevard LeSportsac Van Cleef & Arpels Level 2, The Boulevard Longines Level 2, The Boulevard PENACHE Shoppes at Four Seasons Level 1, The Boulevard Ralph Lauren Level 1, Hard Rock Hotel Rock Shop Abiste Level 1, The Boulevard Salvatore Ferragamo Alain Mikli Level 1, The Boulevard Swarovski Altea Milano Level 2, The Boulevard Tag Heuer Aquascutum Level 1, The Boulevard The Bubble Shop Armani Collezioni Level 2, The Boulevard Timeless Audemars Piguet Level 1, The Boulevard Tumi Autore Level 1, The Boulevard Valentino Bottega Veneta Level 1, The Boulevard Vivienne Westwood Brioni Butani The Esplanade, Wynn Macau Canali Cerruti 1881 16 Alfred Dunhill Chic Elegance 3 Bvlgari Coach 5 Chanel Cole Haan 12 Christian Dior David Yurman 17 Ermenegildo Zegna Diamond SA 10 Fendi Diane Von Furstenberg 21 Ferrari Dilys’ 8 Giorgio Armani Ed Hardy / Christian Audigier 25 Gucci Gieves & Hawkes 18 Hermes Giuseppe Zanotti 23 Hugo Boss Givenchy 6 Louis Vuitton GoldVish S.A. 11 Miu Miu Guess by Marciano 4 Cigar Imporium H&B Medicine Shop 9 Piaget Hugo Boss 27 Prada Jimmy Choo 13 Sundries Juicy Couture 4 The Signature Shop Kate Spade 7 Tiffany & Co. Kent & Curwen 24 Van Cleef & Arpels Kenzo 26 Versace Kwanpen 22 Vertu La Perla Lancel Grand Lapa Hotel Mango Tree Marc by Marc Jacobs 13 Bally Marni 1 Burberry Max Mara 12 Cartier On Pedder 11 Christian Dior Optica Privé 17 Cigar Imporium Renaissance Arts Gallery 10 Alfred Dunhill Roberto Cavalli Class 9 Emporio Armani and Cesare Paciotti 2 Ermenegildo Zegna Samsonite Black Label 16 Florinda Jewelry Shamwari South African Diamonds 8 Hermes Shanghai Tang Hugo Boss Orange Label 5 Shiatzy Chen 4&5 Louis Vuitton Shimansky 6 Omega St. John 7 Salvatore Ferragamo Stefano Ricci 15 Valentino Stuart Weitzman tsesay Valentino Versace

1112 1123 1110 1125 1109 1117 1101/41 1123a 1101/43 1101/22 1101/42 1120 1101/23 1106 1101/20 1102 1101/37 1108 1116 1101/44 1101/26 1101/21 1101/28 1101/25 1121 1115 1101/45 1126 1111 1113 1101/29 1101/38 1101/33 1105 1101/31 1101/39 1101/40

1208 1212 2835b 2836 2805 & 2806 1130 & 1131 1129 2845 2802 1223 2850 2801a 1207 2856 2812 2801 2816 2846 1211 2820 2835a 2847 2851 1226 2858 1215 2807 2838 2859 2829 2837 2840 2817 2849 2857 2813 2831 2841 2808 2848 2823 1213 2800 2825 2818 2839 2833 2821 & 2822 2809 1128 2850a 2832 2842 2853 & 2855

Tourism

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Macau wants HK tourism link-up

Tourism sweetner

Secretary for Social Affairs and Culture, Cheong U says Macau and Hong Kong should develop “multi-destination” itineraries. He was speaking at the third annual meeting between the tourism authorities of the two SARs in Macau last month. Commissioner for Tourism, Philip Yung, led the Hong Kong delegation to the meeting. The delegation met with director of MGTO João Manuel Costa Antunes to review the tourism performance in 2009 and the first quarter of 2010 and to exchange information on the major tourism initiatives and events launched in 2009. They also discussed tourism development in 2010, particularly the promotion of “multi-destination” itineraries, MICE market development and tourism quality enhancement.

The government has pushed forward a special exemption for the tourism sector which means it will be exempt from renewal fees for licenses and identification cards issued by the Macau Government Tourism Office (MGTO). The exemption is valid until the end of this year only and was published on the Official Gazette. The measure has retroactive effects to October 2009. All licensed businesses and activities registered until December 2009, including hotels, guesthouses, restaurants, nightclubs, bars, sauna and massage parlours, health clubs and karaokes, travel agencies, as well as tourist guides, will be included on the exemption. The measure means the tourism sector will save an estimated MOP5 million. Between October last year and May 15, 2010, 279 businesses and professionals have paid fees of more than MOP1.26 million, but they will be refunded.

Hotel occupancy up A total of 641,987 guests checked into hotels and guesthouses in Macau in March 2010, up by 7.6 percent year-on-year. The majority came from the mainland, 52 percent, and Hong Kong, 20.4 percent. The average occupancy rate of hotels and guest-houses increased by 4.9 percentage points year-on-year to 77.5 percent and that of hotels reached 78.2 percent, with 4-star hotels leading at 84.6 percent. The average length of stay of guests increased by 0.1 night to 1.5 nights. The cumulative number of guests reached 1,885,263 in the first quarter of 2010, up by 15.2 percent over the same period of 2009. In the first quarter of 2010, visitor-guests of hotels and guest-houses accounted for 60.7 percent of the total number of tourists, down from 61.9 percent in the same period of 2009. By the end of March 2010, total number of available guest rooms of the hotel sector increased by 1,831 year-on-year to 19,408 rooms.

MGTO Director elected to PATA Director of Macau Government Tourist Office (MGTO), João Manuel Costa Antunes has been elected vice chairman of Pacific Asia Travel Association (PATA) for 2010-2012, and at the same time, ChairmanElect of PATA for the next term. This year, PATA’s Annual Meeting was held between April 22 to 26 in Kuching, Sarawak, Malaysia. Founded in 1951, PATA is a non-profit membership association dedicated to building responsible development of the Asia Pacific travel and tourism industry. MGTO has been a member since 1958. It has more than 800 full members and 7,474 chapter members around the globe.

We are among the fastest growing tourist destinations The latest UNWTO World Tourism Barometer has confirmed an upward trend in international tourist arrivals, with Macau among the fastest growing destinations. The report reveals a seven percent growth in overall international tourist arrivals

was recorded in the first two months of 2010 worldwide. Out of the 77 destinations revealing data for this period, 60 showed positive figures, of which 24 posted double-digit growth, including Macau. JUNE 2010

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Arts & Culture

Super Hip-hop comes to the Macau Cultural Centre next month in the shape of boisterous French dance troupe Accrorap

troupers

JUNE 2010

BY JACK REGAN

139 urn you baseball cap backto-front, loosen those baggy denims, and knock back an energy drink, hip-hop is on its way to Macau. It comes in the shape of energetic French dance troupe Accrorap who will present a series of sketches blending different, striking and surprising dance styles. Blending hip-hop, contemporary dance, break dance, clowning and acrobatics, the performance breaks down barriers and fosters dialogue between different bodies, ages and cultures, mixing popular and classic culture.

Dazzling show This stunning battle creates social gatherings and gives birth to new emotions. At “Little Stories.com” four men tell short stories of lost childhood and the struggle in an uneasy present using bang-up-to-date urban body language. This journey through the essentials of life takes place on a very bleak and simple set, where the outstanding acrobatics and hiphop dance dazzles. Despite the spartan set - which consists of one clothesline - the mood is upbeat in an attempt to convey the idea that the dancers are battling against the odds. This makes for a fascinating study into life’s school of hard knocks.

Two-decade history The Accrorap Dance Company was founded in France in 1989 by Kater Attou, Mourad Merxouki and Eric Mezino, and it has always had a mix of acrobatics and street dance. The company evolved and Attou is now the sole choreographer and artistic director. He was also appointed the new director of the French National Choreographic Centre of La Rochelle. Since its beginnings, Attou’s work has been greatly applauded, praised and awarded. For example, at its premiere, Little Stories. com won the “Mimos” prize from the International Mime Festival of Périgueux, France.

Macau component Together onstage with “Little Stories.com” will be a new piece devised by the participants of “ARTMusing summer – Hip Hop Workshop” under the awesome inspiration of Accrorap, telling the stories of Macau’s youth. This blend of hip-hop and contemporary dance, which takes place in the Cultural Centre’s small auditorium on August 20 and 21, at 8pm and last 80 minutes, has got something for everyone. JUNE 2010

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Six years have passed since the first ever Macau Business issue was published and once again this yearâ&#x20AC;&#x2122;s party was even better than the previous. Our magazine has come a long way just like Macau. This year 270 guests attended the Macau Business Anniversary at The Vista Room at MGM Grand Macau and celebrated with us six years of a wonderful adventure in becoming a key reference magazine in the Pearl River Delta region. A great location for a great event. The traditional lucky draw gave our sixth anniversary that special feeling with amazing and very exclusive prizes awarded to the lucky ones. Once again, the Macau Business partners gave us the chance to throw one of the best parties of the year! Happy Birthday to us and... to YOU!

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Dave Williamson

Frederico Rato and Pedro CortĂŠs

Tommy V.S. Lau

Mafalda Melo and Cristina Lobo

Michel Molliet

Lizette de Senna Fernandes and Jiji Tu

Vicky Chan, Maria Garcia and Gordon Lee

Colin Payne and Damian Quayle

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Andrew and Alexandra Macaulay

Constance Hsu and Amelia Chan

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Victor Chan

Greg Hawkins, Gilberto Lopes and Rui Cernadas

Michelle Tang and Virginia Leung

Irene Xu Yu, Yuci Tai and Weng Fung

Robert and April Drake

Pete Wu and Rebecca Lee

Alice Leonor das Neves Costa Barry Cheong, Serena Chin, Katharine Liu and Reddy Leong

Catarina Morgado, Rita Andorinho and Beth Doherty

Mary Mendoza

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José M.M. Braz-Gomes

Patricia Cheong, António Trindade, Luís and Mafalda Melo

Candy Sam and Herman Leong

Shelly Chan, Charles Ngai, Jennifer Lam, Jeffrey King and Karen Lee

Carlos Duque Simões and António Trindade

Kenneth Jolly, Cecilia Cheang, Janice Woolard and Gary Wollard

Eddy Wong and Renee Sou

Ho Wai Ming and Eric Huang

Bina Gupta shows Macau to her friends

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Jill Rigg, Ben Lee, Carlos Lobo and Leanda Lee

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Gilberto Lopes, Lúcia Lemos and Sales Marques

The Macau Business Team

SJM team shows the love

A good start

Benny Un and friend

Tatyana Ovcharova and Gonçalo Mendes da Maia

Patricia Cheong

Fiona Ng and Jennifer Liao

Frank McFadden, José M.M. Braz-Gomes and Gilberto Lopes JUNE 2010

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Yves Duron gets a fabulous win from Katharine Liu

Rosalind Wade and Paulo A. Azevedo

Eric Huang brings a new client to Hutchison

For the first time ever The Westin Resort Humayoon Shaikhzadeh offers the presidential suite

Dickson Yip offers very special prize from Pacific Cigars

Júlia Brockman and Lytton Ao

Benny Un presents the Canon Prize

Luís Melo and Simon Grunwell

Wendy Gallagher and Fátima Cameira

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Ant贸nio Trindade and Simon Grunwell

Paulo A. Azevedo and Jennifer Liao

Gloria McComas and Ant贸nio Aguiar

Fiona Ng receives the Seapower prize from Alex Chan

Catarina Morgado and Vicky Chan

Ada Chio de La Cruz and Isabel Monteiro

Mica Victal receives Mortons prize from Andrea Mansfield

John Catt and Bruna Pablo

Lu铆s Melo and Jo茫o Farinha

Carmel Yeung delivers a Grand Lapa great prize

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A GRACIOUS EVENT More than 300 people gathered at MGM for the International Ladies Club (ILCM) Imperial Charity Ball – and raised a record amount for charity. A total of MOP665,000 was raised to help a host of organisations and institutions which help those in Macau who need it most. A delighted ILCM President Andrea Mansfield said: “The ILCM supports in excess of 19 charities in Macau from Lar de Nossa Senhora da Penha, São José Ka ho School to Evangelist Fellowship Home for Children and Missionaries of Charity. “We also help the Good Sheppard Centre to Cradle of Hope and Fountain of Hope.’’ Well done! we say.

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JUNE 2010

150 JOHN DELURY ASSOCIATE DIRECTOR OF THE ASIA SOCIETY’S CENTER ON US-CHINA RELATIONS AND TEACHES AT COLUMBIA UNIVERSITY

The Chinese Road to Pyongyang KIM JONG IL’S VISIT TO CHINA THIS WEEK WAS A GENTLE REMINDER THAT THE ROAD TO PYONGYANG LEADS THROUGH BEIJING. CHINA IS THE ONLY POWER THAT HAS REMAINED ENGAGED WITH NORTH KOREA, THROUGH MANY UPS AND DOWNS, WHEREAS RUSSIA, JAPAN, THE UNITED STATES, AND SOUTH KOREA HAVE ALL COME AND GONE. By keeping a door open to North Korea’s leaders, China is making a substantial contribution to regional peace. This is bold diplomacy – for which China is given little credit – at a highly sensitive moment. Nevertheless, China’s “leverage” over North Korea is in part illusory. Kim’s visit should be evaluated in terms of ChineseNorth Korean relations as they are, rather than as others might wish them to be. Doing so reveals the role left to America and South Korea to engage the North in order to revive the denuclearization process and repair inter-Korean relations. Three widespread misconceptions distorted the coverage of Kim’s visit to China. The first misconception is that he desperately sought Chinese aid to prop up his regime in the face of seething discontent after botched currency reforms. But, although North Korea’s latest economic travails have shaken the leadership, the regime has weathered worse. And the economic relationship between China and North Korea is driven as much by material interests and economic factors as it is by concerns over geopolitical stability. Indeed, trade overshadows aid, and China – led by its border provinces – is now North Korea’s main trading partner and source of foreign investment. Chinese Premier Wen Jiabao announced a major trade package during his trip to Pyongyang last November, perhaps on the order of $10 billion. North Korea recently established the State Development Bank and Taepung International Investment Group (headed by a Korean-Chinese businessman), charged with attracting foreign investment. There has also been renewed interest in developing the port city of Rason near the China-Russia-North Korea border as a special economic zone. Although North Korea has doggedly stood behind its outmoded model of state control and central planning, Kim’s visits to the boom cities of Dalian and Tianjin reflect his tentative but ongoing interest in alternative ways to achieve “strength and prosperity” for his country. The second misperception is that Chinese President Hu Jintao offered Kim a “big package” of aid in exchange for returning to the Six Party Talks on North Korea’s nuclear program. Hu no doubt looked for ways to resuscitate the talks, but not by buying off Kim with aid. Rather, Hu would have determined the level of Kim’s readiness to resume, what preconditions and incentives are at play, and what room for maneuver exists, given the position of the other parties. Kim apparently reiterated his government’s willingness to return to the talks, but the question is what kind of assurances he was able to give Hu in order to persuade a wary US and JUNE 2010

hostile South Korea that he is really ready to deal. Moreover, Kim, too, needs assurances from Hu – not that Chinese aid is coming, but that the Americans, South Koreans, and Japanese are prepared to give and take. The final misconception is that Hu might have demanded an explanation from Kim as to the causes of the fatal sinking of a South Korean vessel in late March. Hu, having recently met with South Korean President Lee Myung-bak, may have discussed the issue with Kim, as well as the intense pressure Lee is under to respond, if not retaliate. But the Chinese do not assume that North Korea is guilty. Even in the face of strong evidence of North Korean wrongdoing, the Chinese are inclined to view the incident in the context of inter-Korean relations, and do not

South Korea undoubtedly faces the biggest dilemma, and the way forward will have to await the conclusions of the investigation into the sinking of its warship and the deaths of its sailors. But one way or another, President Lee needs to find a way to get inter-Korean relations back on a peaceful track. want to let it determine the fate of the Six Party Talks. Rather than criticize China, US President Barack Obama and Lee should now reach out to the Chinese for thorough debriefings about what was learned from Kim’s visit – on security as well as economic issues. China should continue to lead the effort to encourage reform and opening of the North Korean economy, with help from international financial institutions. The US, moreover, should actively seek a path back to the Six Party Talks, resisting both the fatalistic idea that North Korea can never be persuaded to roll back its nuclear program and the dangerous notion of simply waiting for the North Korean regime to come begging, if not collapse. South Korea undoubtedly faces the biggest dilemma, and the way forward will have to await the conclusions of the investigation into the sinking of its warship and the deaths of its sailors. But one way or another, President Lee needs to find a way to get inter-Korean relations back on a peaceful track.

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THE NEW VAMPIRES

For some time now, people have been telling Frozen Spy that there is an elite group of people thirsty for money-making deals and that now, finally, their chance has come to satisfy their hunger. Strange, this spy from the cold has replied, since the same people have been feeding very well in the 10 years since project SAR began. We were told that it was child’s play. But what are a few tens of millions compared to hundreds of millions they now expect to earn? Get ready, dear readers, for some reports of slander. Interesting days of shame are on the way!

MIGHT AS WELL NOT HAVE BOTHERED

The University of Saint Joseph has revealed their list of scholarships and their respective sponsors. Among the scholarships sponsored by different institutions worth between MOP10,000 and MOP20,000 is one backed by the Macau Productivity and Technology Transfer Center worth MOP3,000 to be awarded to 2009/2010’s best student. This little scholarship should make the MPTTC bow its head in shame but, apparently, there IS interest in it...

RE-EDUCATION CAMP REQUIRED!

Xu Chongde, professor of Chinese law and member of the committee that wrote the Basic Law, came to Macau to say a bunch of silly things that we can only excuse on account of his old age. His alleged comments that the territory should abandon its Portuguese-based law a mere ten years after the handover were widely reported in the media. They fly in the face of the same Basic Law he helped write. It’s no surprise that there are some in Macau who support the same idea – and some were sat and listened to the professor as he trotted it out. What is surprising is that some people treat the Law like it’s a concept that changes with the moon phases. In the good old days, the professor would have been entitled to a few days off…to update his knowledge!

BETTER THAN THE FIRST

The same, er… professor also said: “Democracy is to vote for the best candidate”. We now understand that there’s no way around this and some people are better off in the Gulag’s tribal councils. Democracy, my friend, is the ability to vote. Period. If the best candidate is elected – according to each voter’s perception – fantastic! But at least we ALL have the right to choose, instead of just a few chosen ones. Like His Excellency Mr Xu.

FRIENDS IN VERY HIGH PLACES

A few days ago, a delicious story was published by a Portuguese daily. The president of the Nautical Club signed a contract with an offshore company to lease a part of the land that the government rented to the Club, so that a 45-storey building could be built. Some of the club members were unhappy and complained to the government. The president says they are jealous and accuses their leader of owning The Praia building, a project that was recently authorised to build a few more dozen storeys (although the building is already finished) and thus make its owner a billion patacas richer. Among the government, its friends, and its enemies´ friends, live the people, who are blind, deaf and mute. Just like Justice!

TRAINING…WHO?

Good sense seems to have taken a back seat as the Labour Department moves ahead with protecting locals. Now it is paying for training courses for eligible unemployed construction workers (provided by the city’s stronger associations). Of the eligible workers – many of whom were gathered by the very associations who get the government money only about half have shown any interest in being trained. Whoever is responsible for investigating these cases of doubtful legality (because on a moral level there are no doubts left), is sleeping on the job…

JUNE 2010