Macau’s CSR Success

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With the long-awaited re-tendering of Macau casino licenses just around the corner, the SARs gaming concessionaires are making sure their Corporate Social Responsibility (CSR) efforts are sending a positive message.

Since the liberalization of Macaus casino industry in 2002, the six gaming concessionaires have contributed over US$165 billion in tax dollars to the citys bulging coffers, a stupendous amount of money which without question has changed the fortunes of the people of Macau.

In 2019 alone, before the COVID-19 pandemic threatened to bring the industry to its knees, the Macau SAR Government collected taxes of MOP$112.7 billion (US$14.1 billion), some of which was used to prop up the economy when borders slammed shut just a few months later. Even so, the monetary authority reported in February 2021 that Macaus fiscal reserves remained at a very healthy MOP$663.6 billion (US$83 billion) with around 85% of the annual tax take coming directly from gaming.

But helping Macau become the second richest place on earth (behind only Qatar in per capita GDP in 2019) isnt the only contribution its gaming concessionaires have made. They are also the driving force behind the citys Corporate Social Responsibility (CSR) programs, pouring massive amounts of time and resources each year into improving the lives of those in society in all manner of ways.

Macaus concessionaires have played a key role in boosting Macaus vaccination rate.

The six concessionaires Galaxy Entertainment Group, Melco Resorts, MGM China, Sands China, SJM Resorts and Wynn Macau represent the largest private – sector employers in Macau, with more than 100,000 employees between them equal to 15% of the population including over 25,000 at Sands China alone. Whether by design or default, this means they hold enormous responsibility as both leaders of the business community and, to a certain extent, after the Macau government itself, guardians of the people.

While not the only companies in Macau committed to CSR initiatives, the six concessionaires are often the first outlets the government turns to in times of crisis. In this vein, they have played a key role in Macaus fight against the COVID-19 pandemic. This has included the donation of more than 4 million face masks, the provision of hotels as quarantine facilities for returning travelers and tourists and most recently working with government to boost vaccination rates. By hosting a raft of educational seminars and free vaccine centers for staff and their families, the concessionaires have helped boost Macaus vaccination rate from 8% in May this year to 43% as of mid-August.

Yet when it comes to CSR in Macau, there is much more than meets the eye. In recent years the Macau government has been placing an increasingly strong emphasis on CSR initiatives and the concessionaires obligations to the Macau community, the Chinese motherland and society at large. Its long been known that integrated resorts with gaming are stable only when they have a symbiotic relationship with the community in which they operate, in what might be termed a social license, which sits right alongside the privileged gaming license each operator enjoys.

This is not a new phenomenon. Even back in the days of the pre-liberalization gaming monopoly in place for the last four decades of the last century, Dr Stanley Ho shrewdly shared his wealth with the people of Macau, sometimes acting as a kind of behind-the-scenes last resort when the government urgently needed funds for some form of community need. For example, he long took on the cost of annually dredging the waterway between the Macau peninsula and Taipa so that marine traffic could safely pass.

This kind of CSR emphasis has been closely linked to the looming expiration of all six gaming licenses in June 2022, none of which will be automatically renewed. Instead, the government will conduct a full re-tendering process, after which new licenses will be issued to the successful candidates. No details on re-tendering requirements have been released, but it is widely believed that past CSR efforts will form an important part of the assessment. There may also be additional CSR requirements stipulated in new license agreements, although not everyone agrees that this is the correct direction to take.

According to Professor Carlos Noronha, Associate Professor at the University of Macau and Vice Chairman of the Executive Council of the Macau Institute for Corporate Social Responsibility in Greater China, Macaus concessionaires have already demonstrated their eagerness to contribute by responding very quickly to the COVID-19 pandemic and to Typhoon Hato, which left a trail of destruction after ripping through the city in August 2017.

However Professor Noronha, adds, Right now may not be an appropriate time to make any drastic decisions [on re-tendering expectations].

Considering the fact that Macaus gaming tax rate is almost the highest in the world [at 39%], it can be seen as unreasonable to raise the tax rate by an extra 1% or 2% for CSR purposes.

I have doubts over the effectiveness of including CSR as part of the lawful requirement for the gaming relicense. It is difficult to capture the spirit and essence of CSR in terms of percentage, and it is even more difficult to evaluate the CSR deliverables of the concessionaires without a legal format of reporting and auditing process in place. The Macau government needs to put some more thought into the reporting requirement and auditing process for the concessionaires.

Typhoon Hato left a trail of destruction when it struck Macau in 2017.

While future obligations are out of the concessionaires control, present day efforts are not, and it is undeniable that the substantial CSR programs already in place represent a very major and visible component of each companys corporate culture. This is commensurate with studies showing that robust CSR programs boost employee engagement, morale and job satisfaction by providing workers with a sense they are making a positive contribution to their workplace and community.

 

Broadly speaking, the CSR initiatives of Macaus concessionaires can be separated into six primary pillars. These are:

  • One Country (engaging with and supporting mainland China)
  • Sustainability, the environment and green initiatives
  • Supporting local SMEs
  • Promoting responsible gambling
  • Personal development of local staff Community engagement initiatives
  • A detailed study by IAG of the CSR initiatives posted in the past year by the Big 6 Macau concessionaires on their various online platforms shows a total of 320 CSR initiatives between them, but this is very likely a significant undercount given not all initiatives may be posted.

    Breaking those initiatives down by category, community engagement including the areas of culture, heritage, arts, sports and education was by far the most prominent with 89 separate initiatives.

    Among those initiatives supported by Wynns local Macau charity, Wynn Care Foundation, has been the launch of an online, flexible work-matching platform called WeCare-Happy-Jobs, which provides improved flexibility for companies and job seekers to realize the potential of labour in the market and to promote social enhancement. In 2021, Wynn Care introduced a new feature to the platform, enabling freelancers and self-employed professionals to pair up with suitable companies and individuals on working opportunities. It also promotes womens employment, diversification and labour productivity.

    Galaxy Entertainment Group promoted One Country with a range of initiatives under this pillar in the past year, for example holding a sharing session for executives in March following Chinas Two Sessions the Fourth Plenary Session of the 13th National Peoples Congress (NPC) and the 13th National Committee of the Chinese Peoples Political Consultative Conference (CPPCC).

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    At the sharing session, GEG Vice-Chairman and Member of the CPPCC Mr Francis Lui, Deputy of the NPC Mr Kou Hoi and Member of the CPPCC Ms Ho Teng Iat gave an overview on the Two Sessions and detailed many of the Central Governments work reports and priorities for the 14th Five-Year Plan.

    Showing its support for SMEs via numerous separate initiatives, Melco Resorts hosted a series of 60 roadshow sessions in 2020 which helped 60 local SMEs and NGOs generate almost MOP$3.7 million, providing opportunities for business promotion and direct selling to 16,000 staff working at Melcos properties in Macau.

    Heart of House roadshow series helps vendors generate revenue as well as market exposure, especially through the unprecedented challenges of the past 12 months, said Melcos Executive Vice President and Chief of Staff to Chairman & CEO, Akiko Takahashi.

    Via roadshows and further ongoing programs we strive to continue to realize our commitment to the local community to enhance SME prosperity and to help local businesses succeed.

    MGM has been extremely active in promoting Education over the past year, with many separate initiatives in that time. Among them was the MGM x MYEIC Young Entrepreneur Nurturing Program a two-year program offering participants a series of professional guidance opportunities through mentorship with industry professionals. The aim is to enhance the business skills, professional knowledge and competitiveness of young entrepreneurs, which is seen as hugely beneficial in pushing forward the launch of their business projects.

    SJM Resorts held an opening ceremony in July to celebrate its collaboration with eight local artists via a series of exhibitions running from July to October 2021 at its Macau integrated resorts, Grand Lisboa and Grand Lisboa Palace. All eight have had works specially commissioned to permanently feature at Grand Lisboa Palace one of many ongoing arts and culture initiatives by SJM.

    SJM Resorts held an opening ceremony in July to celebrate its collaboration with eight local artists

    With a host of separate initiatives in the area of staff development, Sands China has developed a diploma program in partnership with the University of Macau to support its team members career advancement and academic pursuits. Comprising staff from a diverse group of gaming and non-gaming departments, the Class of 2020 saw 46 Sands China team members awarded diplomas after completing the University of Macaus one-year Diploma in Business Management.

    In comments made to IAG for this article, Sands China emphasized its commitment to CSR, stating, It is imperative that corporations operate in harmony with the communities in which they operate, whether in the form of environmental sustainability, responsible gaming, or philanthropic work Being a member of the community is a privilege that comes with the opportunity and responsibility to help the community thrive alongside the company, such as by supporting the growth of local SMEs.

    Sands China has developed a diploma program for team members to support their career advancement and academic pursuits.

    Corporate social responsibility is at the heart of how we do business the challenges brought on by the pandemic make the work of carrying out corporate social responsibility even more essential, in order to support the community in a time of need.

    According to Professor Noronha, Macaus concessionaires are uniquely positioned to lead Macau when it comes to CSR initiatives, and while he remains doubtful about suggestions that the government should mandate greater responsibilities in its upcoming tender, he says concessionaires hold the key to the betterment of Macaus society.

    CSR initiatives employed by Macaus concessionaires regularly include distributing food hampers to those in need.

    CSR is not about giving out a few gifts and making donations, he says.

    CSR should involve three elements, which are economy, people and environment. But in order for an organization to become socially responsible, it must first establish itself as a sustainable and profitable business.

    That means not all companies can afford to do CSR, such as purchasing and installing energy saving equipment to go green.

    Naturally Macau locals would expect the concessionaires, being the leading industry in Macau, to do more CSR.

    This could be achieved, he adds, via the formation of an independent body tasked with assessing the legitimacy of CSR initiatives by way of both the reporting and auditing of related financials and the true sustainability and impact of each.

    This body could also be used to assign an equal share of responsibilities to each concessionaire in times of crisis, ensuring CSR responsibilities are fair to all concessionaires while maintaining benefit to the public interest.

    But I think education is the main opportunity for the government and concessionaires to work together, Professor Noronha says.

    There may not be many effective channels through which the government can promote CSR but most locals will go with their families to Macaus integrated resorts for dining and leisure purposes.

    This means the concessionaires can achieve a better penetration rate than the government in terms of delivering messages to the locals.

    By working together like this they can really highlight a positive side of the [integrated resort] industry.