Jay Chun, chairman of the MGEMA and the man behind Asia’s big hitters Paradise Entertainment and LT Game, has a clear vision for Macau. He’s been driving it for many years, be it through the development of pioneering, revolutionary products or through his multivarious businesses in the SAR. At the helm of the MGEMA, a trade body he envisioned, formed and then steered over the past 5 years, Chun has worked hard to bring Macau right into the heart of the international business arena. Now, his sights are on the city itself and positioning gaming to the front of an ambitious Government project to make Macau the region’s major business and leisure destination. But this requires change: and during the past twelve months, he and his association have been charting the roadmap that will achieve these goals.
This has been a dramatic year on so many different levels. How difficult has it been for you and the MGEMA?
Without doubt, this has been a year of dynamic change. In every region, sector and field of life – we have witnessed global transformations that will almost certainly shape our future for years to come. But in such an uncertain, yet vibrant environment, it’s absolutely crucial to balance clear direction with a degree of flexibility. This has been our toughest challenge, but I think we have stayed on course and fashioned an exciting prospectus for moving forward.
That’s an intriguing deposition. What has that entailed?
We probably need to look at this in two ways. We are a very young body, and therefore there is still so much to do and develop. We all understand that and so there are no delusions as to where we are and we want to be. But the MGEMA is at a landmark stage of its development. We have established ourselves as the single most important representative voice of the gaming and leisure industry, not just in Macau but throughout the south east Asia region. The work we have undertaken over the past year has focused on enhancing this status, and ensuring that our industry can – and must – play its part in determining the destiny of our businesses, our city and our continent.
That’s clearly a very good place to be. But how do you see yourself determining your destiny?
Well the starting point has been our relationship with the government. Much of our focus has been on building the trust and understanding of the Macau SAR Government and continuously developing this relationship. Throughout the year, the MGEMA has been vocal in putting its members’ ideas and concerns forward in an effort to ensure that the commercial, employment and trading environment supports our industry’s endeavours both short and long term. That is and always will be our primary job. And I believe this hard work has gone a long way in persuading the government that our dialogue, contribution and interests are an important consideration in Macau’s affairs.
The success of this relationship is well documented, especially with the support and backing the Macau SAR Government has given to the your flagship event MGS Entertainment Show. That must be a significant boost for the trade body.
Of course. The SAR Government have been exceptional supporters of MGS and the association itself. The grants and government initiatives have been a major asset to the show’s reputation. Our latest dialogue with the Macau Government department, DICJ, continued that positive line and I’m hopeful that the government will continue to support us.
In fairness, this is probably not representative of governmental relationships with gaming bodies around the world. And that even goes for the US where a casino mogul is president! So, what’s the story of your success?
I think it’s down to our concentration on core dual objectives. Since our formation in 2012, it has been clear that the MGEMA and the SAR Government share a common driving force: to continue raising the standards of life in Macau through prosperity, innovation and opportunity. We will always disagree on certain issues in the marketplace or over regulation; that’s to be expected, but also appreciated. Those areas of divergence are a mark of respect: we both represent our arguments with strength respect: we both represent our arguments with strength and vigour, but most importantly listen to one another. That aside, however, the MGEMA’s members and the SAR Government believe in our city and its potential. That’s why the association is fully behind the Macau SAR’s plan for economic diversity. You must remember that our members are the largest corporations and entrepreneurial pioneers in Macau and their input to the health and wealth of our region is vital. You cannot play this role without acknowledging your responsibilities in the city’s future.
Supportive words are one thing, and easily delivered. But it’s practical support that will be the final proof. How do you see your members and industry colleagues playing their part?
I think the principal answer here is very simple. Gaming and equipment manufacturing will be a primary fiscal driver for the diversification of our city’s economy. We see it as our duty to make this work. But it’s not going to be easy. Change and modernisation are crucial within our own industry to make this happen and that’s why we need a strong and positive ongoing dialogue with Government to ensure this.
Are you looking for industry reforms?
No, this isn’t simple reform – it’s revitalisation. Diversification is such an exciting prospect for the city, it has to be achieved. But the marketplace needs to be fashioned in a way that can deliver on these expectations in a sustainable way. It’s very difficult to modernise an economy if its industries aren’t modernised as well. And equally important, we cannot be complacent and just rely on a turnaround in gaming revenues alone. Two years of a sustained downturn has taught us one thing: we cannot depend on independent market forces to keep our new found momentum going. We need a model which is more flexible and robust.
So what are you proposing?
Well, Macau’s future sustainability is dependent as much on strong industrial bases as it is on a diverse economy. The gaming sector needs a new framework and new methodologies. Our industry faces strong international competition, especially on our own doorstep from neighouring jurisdictions. Technological advances are running fast in these marketplaces and we can’t just keep pace – we must set the pace. This objective can only be achieved if we have a strong gaming industry. A strong gaming industry will deliver increased revenues; fund a modernised infrastructure; increase employment; raise the number of skilled workers; build Macau into a manufacturing and technology hub for the region; and open the door to becoming an international trading route for the industries and services that support a destination capital on the world stage.
And how does this play out on an MGEMA wish list?
Well that’s far too long to discuss! Cutting down to the key points, we have submitted a proposal to the SAR Government for a radical restructuring of the gaming sector. To build Macau into a Smart City; a manufacturing city; a destination city, the MGEMA has identified 4 key initiatives to transform the gaming landscape and help raise the revenues for a better, bigger and more diverse Macau. We need the gaming industry to be recognised with the same business status as the MICE, culture and creative sectors. We are looking to increase the proportion of Made in Macao gaming equipment in local casinos to be no less than 50pc. We want to operate a leasing/revenue share model for gaming equipment rather than a purchase model. And we want to see a broadening in the number of Government initiatives to promote the development of local businesses in the gaming equipment sector.
That certainly has radical repercussions. Do you see this as a viable proposition?
For a domestic industry that has remained largely unchanged for decades, these proposals might well seem radical. But they’re not. To the outside world, which is moving at an economically and technologically faster pace than ourselves, they are considered standard fare. In Las Vegas, for example, the revenue sharing model has been operating for years and many believe that it is a primary contributor to the strategy that has guided the US city into a new era of increased revenue, a new perception and a modern relevant response to a changing economic model.
Does this sit well within an outward looking global program which we know you are a major advocate of?
You are absolutely right on that point. Our industry, our city and our vision is and must be 100 per cent fixed on looking outwards. We are a major industry; we are in a city which has enormous investment projects; we have a growth and development program that will extend from Macau all the way through the continents along the old Silk Road trading route. You tell me whether this is not an international opportunity? The MGEMA recently agreed with the Government a proposition that will draw new members into the association from industries and sectors that are aligned, directly and indirectly to gaming equipment manufacturing. These industries will lead the way in strengthening our leisure, hospitality, technological and cultural ties and bring the diversity message to the very heart of our association’s activities. Our partners here will be the innovators in design; the creatives behind the platforms and the systems; the industries that provide funding for the all-important entrepreneurial spirit. The MGEMA is looking to serve as the hub for the business community that will lead the way for economic diversity.
You touched on a subject here that we spoke about last year – and we are hearing it much more, and from all angles. The Silk Road Trading Route sounds like it’s going to be very congested in the coming years.
Well, it’s officially the Belt and Road Initiative which stems from Beijing and is undoubtedly one of the most aspirational economic projects on the world stage for possibly a century. It’s about trading links across the whole of Asia and through to Europe and beyond. It’s a powerful vision for economic growth on an immeasurable scale. We’ve taken it on board through the MGEMA and the MGS Entertainment Show. It’s a message that needs to be talked about, explored and implemented.
Is that one of the reasons for the MGEMA’s growing relationship with the Central People’s Republic?
It’s certainly one of the major benefits of our association with the Central People’s Republic Liaison Office in the Macao SAR. In fact, now that I have a global audience, I want to pay special tribute to their role and support. The unique engagement the CPR’s office in Macao has with our association has been invaluable. The direction of the CPR is fundamental in all our affairs and to have the Liaison Office so close to our decision making process is a huge asset. To the international market, it has given weight and gravitas to the work that we do. It has also helped provide clarity and direction on the broader plans and our role within it. The Belt and Road Initiative, for example, could not be drawn into our vision so readily without this close relationship. To have the CPR so closely engaged with the MGEMA will enable us to continue to push this vision forward to the global market. I am absolutely delighted to welcome the CPR Liaison Office representation to the MGEMA Board for another year?
Mr Chun, this has been an illuminating discussion, as always. If you had to sum up your aspirations in a 30 second soundbite, how would you do so?
The MGEMA has made some radical, ambitious proposals for the future of our gaming and manufacturing industry. More importantly, they are ones that will lay the foundations for the city’s evolution into a worldwide destination economy. We want to sit at the heart of Macau’s diversification program and play a key role in the CPR’s growth and development project for the Silk Road trading route. We believe that with the changes we are seeking, the MGEMA members can help to achieve the city’s two core objectives: deliver on economic diversity, and draw in an international partnership that shapes the Belt and Road vision into a reality of growth and opportunity.