MACAU (1999-2009) / URBAN PLANNING OF COTAI: 1. GOVERNMENT INCENTIVES IN DECISION MAKING

Since the handover of Macau to the Chinese government, administrative transparency of the government had been low. All judgments and policies had been carried out without public consultation. This has given rise to black box activities, which has dominated the decisions made by the government, along the entire period until 2006, when the corruption case of Ao Man Long was exposed. At that time, the only concern of the government has been to make money to cover the financial losses incurred from the financial depression following the change in political power.

In pursuit of financial recovery, the government decided to change the whole residential Cotai city into a gambling plan. In 2001, the government of Macau announced the opening of the Macau gaming market to new license holders, where three gaming licenses were to be offered. Although an apparently fair bidding contest was introduced, it seemed to be a show merely for the government to end the longstanding monopoly of the gambling industry, held by Stanley Ho, and regain control of the market.

Subsequently, the government panel selected Steve Wynn’s Wynn Resorts, Galaxy Entertainment Group in partnership with Sheldon Adelson’s Las Vegas Sands International (LVSI), owned by Lui Che Woo, and finally Stanley Ho’s Sociedade de Jogos de Macau (SJM), as the three license holders. Stanley Ho, in the end still got a piece of the action and participated in the new gambling plan of Cotai Strip. When first shown the Cotai area, Adelson initially felt like a banished foreigner since his new casino was proposed to be so far from the Macau peninsula, where Stanley Ho believed to be the centre of everything. However, as Adelson’s vision corresponded with the government, he was granted much of the land in Cotai for casino developments, which he believed could ultimately rival the famed Las Vegas Strip. Although the 250 acres that make up the Cotai strip has sequentially been parcelled and split by the government into more license holders, LVSI and Galaxy has still managed to maintain control over the two largest parcels where Stanley Ho’s family could not do any harm to the big picture.

The “Cotai Strip” has since been considered a place of critical mass. Therefore, all license holders have been keen to secure their presence there. The government is ultimately the one who decides who can keep their licenses. It is also understood that the government has plans to reclaim a further 983 acres of land over the next twenty years, though much of this will not be allocated for casino use. (Although as with everything else in Macau, things can change.) Thus, having a piece of land in a prime location is an exceptionally valuable and scarce resource that is ultimately controlled by government and politics.

All in all, the plan of the government is to relocate the business centre of Macau to the Cotai Strip in order to have a chance to stand against Stanley Ho, hoping to resume control over the casino business. With the help of Adelson, the government had actually ordered to speeding up of the whole building progress. In 2007, Sands built its new flagship casino Venetian Macao Resort Hotel in Cotai. With its tremendous size and ‘Mediterranean’ atmosphere, the Venetian has successfully attracted significant numbers of gamblers, visitors, and convention and exhibition activities to Cotai.

Although “black box activities” wad been involved in the whole planning process (the Ao Man Long corruption case), the Macau government’s efforts towards boosting local economy have been remarkably successful in realizing the city’s comparative advantages (its special political and historical situations) and making it one of the richest places in Asia within an extremely short period!

 

 

 

Bibliography:

Godinho, J.A., 2010. Macau Casino Gaming Law and Regulation: At a Turning Point?. Available at SSRN 1490604.

MacDonald, A. and Eadington, W.R., 2006. Macau–A lesson in scarcity, value and politics. Retrieved online July, 7, p.2006.

Tieben, H., 2009. Urban image construction in Macau in the first decade after the “handover”, 1999-2008. Journal of Current Chinese Affairs38(1), pp.49-72.

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