GBA Brief

Introducing Ho Iat-seng, Macau’s new chief executive

Ho Iat-seng was elected as Macau’s new political head by a committee of 400 local representatives at the end of August. What can we expect from his first term in office?

Gambling on election results has become big business in recent years. Colourful candidates help juice up the betting. When Donald Trump first announced his campaign for the US presidency in August 2015 the odds on his victory were 25 to 1, reported Fortune magazine. They were still 5 to 1 on the day of the election, showing that he was still the rank outsider, even in a two-horse race. One gutsy gambler made $2.5 million betting on his victory, according to Betfair.

Paradoxically in the gambling hub of Macau all bets were off when it came to the election of its new leader last month. That’s because there was only one candidate: Ho Iat-seng was selected unopposed as chief executive-designate by a committee of 400 local representatives. 

Ho takes on the role in December, after his election victory was approved last week by the State Council. Its spokesman was complimentary, describing the city’s new boss as “up to the central government’s standard for the position, as he loves the country and Macau, and is trusted by the central government”.

Born in Macau to a wealthy family, Ho’s ties with mainland China are extensive after studying there as a young man and serving for many years on the National People’s Congress, before resigning as a precursor to getting Macau’s top political job. His campaign has talked about making government more efficient and the local media has sounded approving of his main career as a businessman, saying that it makes him a man who will get things done. But Ho will be taking office at a difficult time, with gaming revenues down sharply this year and the economy dipping into a technical recession after two consecutive quarters of negative growth.

Also getting a fair amount of comment is his lack of direct ties to the casino industry, with the suggestion that this might make him more willing to overhaul the all-powerful sector. At the very least he’ll need to oversee the retendering for gaming licences by casino giants Sands China, Wynn Macau, SJM Holdings, MGM China, Galaxy Entertainment and Melco Resorts, all of whose concessions expire in 2022. 

In fact, this process has already been delayed and there is speculation that the outcome is being complicated by the trade war with Washington, with the American casino operators becoming potential pawns in a wider battle. 

If they don’t get licence extensions, the concession holders will lose their gaming revenues, tipping their giant resorts into heavy losses. Those affected would include Sheldon Adelson, chairman of the Las Vegas Sands, and the biggest financial backer of Donald Trump’s presidential campaign. Adelson operates three major casino hotels – the Sands Macau, the Venetian and the Parisian – and any indication they’ll miss out could have greater impact between now and Trump’s re-election bid next November.

Ho has been careful to avoid specifics on the relicencing plan, noting only that a “healthy” gaming sector is crucial to the broader development of Macau’s economy. Like previous chief executives, he has been talking about diversifying the economy away from its reliance on gaming as well, although progress here has been slow. In the meantime he will persist with his predecessor’s policy of pushing the casinos to double the share of revenues they earn from non-gaming (currently about a fifth). They have already responded by investing in a better selection of hotel rooms, dining options and retail choices. But policymakers want to see something much more transformative in arts and exhibitions, world-class entertainment and business conventions. 

Ho will probably demand something similar as part of the bargain for licence renewal. Nonetheless he will want to avoid upheaval for the casinos, which deliver the vast majority of the city’s taxes – and he took a conservative line in his comments last month that “many people expressed they do not want to mess up Macau”.