It was with interest I read this article yesterday from respected Las Vegas Review-Journal columnist Howard Stutz, saying he knows better than to wonder aloud whether “the Chinese government is trying to sabotage Macau’s already sinking gaming market”.
But does Howard really know better?
I’m normally not a fan of conspiracy theories – my mother always used to say in the choice between a conspiracy and a cock-up it’s usually the latter – but perhaps we should just consider the idea for just a moment.
Recently I was dining with a senior gaming executive known not only for his sometimes controversial views but for being a very effective operator over the last three decades. I don’t know if it was the wine talking, but he also wondered aloud whether the central Chinese government was on a deliberate campaign to ruin, or at least devastate, the Macau gaming industry.
“Surely not”, I protested, “Why would they do that?” Our esteemed friend then went on to paint an elaborate scenario that went something like this:
- When the gaming concessions were offered to the American operators (MGM, Sands and Wynn), the Chinese government had no conception of how much money would be involved.
- China is now concerned about the enormous capital flight out of China via the US gaming companies.
- They want to demonstrate the absolute control they have over Macau gaming concessionaire profitability before the concession renewal negotiations begin (likely later this year).
- Perhaps there is an opportunity to wrestle at least part of the ownership of the revenue stream away from the US-led companies and more into Chinese hands.
Plausible? Maybe. One thing’s for sure, when stories like this start circulating amongst executives, we know Macau is in a very bad place.
