M
acau was the first European settlement in the Far East, established on the 16th century. Pursuant to an international treaty, known
as the Sino-Portuguese Joint Declaration signed on April 13, 1987, between the People’s Republic of China (“PRC”) and Portugal, Macau would become a Special Administrative Region of the PRC.
Under the formula “One country, Two systems”, China’s socialist-economic system is not practiced in Macau, and Macau enjoys a high degree of autonomy in all matters for the following 50 years, except for foreign and defence affairs.
Macau officials run Macau through the exercise of separate executive, legislative, and judicial powers and its legal system is based largely on Portuguese law or Portuguese civil law system. It is characterized by its strict adherence to the principles of the rule of law and judiciary independence.
The Background and State of Gaming in Macau
Gaming in Macau has existed for centuries and was legalised in the mid nineteenth century. In 2002 the forty-year monopoly ended and three gaming licenses and three gaming sublicenses were granted to gaming operators Sociedade de Jogos de Macau (SJM), Wynn Resorts, Galaxy Entertainment Group and to Las Vegas Sands, MGM Mirage/Pansy Ho and Melco/PBL, respectively.
Currently, 34 casinos operate in Macau, with a total of 5,237 tables and 15,098 slot machines.
Numbers just release show again that Macau is in fact the world’s gaming capital and it is forecasted by analysts that Macau gambling revenues will reach USD$34 billion this year, when Las Vegas is forecasted to reach USD$6 billion in gambling revenues.
In the first three quarters of 2011 Macau has seen an increase of 46% in gambling revenues when compared with last year, being that the total accumulated this year is already higher than the total accumulated in 2010.
As reported by Lusa, figures show that, in October this year, 50% of the gross gaming revenue market share was retained by Sociedade de Jogos de Macau (SJM) – 26% - and by Galaxy Entertainment Group – 24%. Sands China, owned by Sheldon Adelson’s Las Vegas Sands, ranked
in third with 15%, followed by Melco Crown Entertainment with 14%, Wynn Macau with 13% and MGM Macau with 8%.
Of these revenues, almost 70% derive from the VIP segment, where the biggest contributors are the junkets.
The different types of games of fortune and chance currently licensed in Macau are Roulette, Black Jack, VIP Baccarat, Baccarat, Fantan, Cussec, Paikao, Mahjong, Slot Machines, Mahjong Paikao, Makccarat, 3-Card Poker, Fish-Prawn-Crab, 3-Card Baccarat Game, Craps, Texas Holdem Poker, Tombola, Lucky Wheel, Live Multi Game, Stud Poker, Q Poker, Casino War, Fortune 3 Card Poker, Fortune 8, Dragon Phoenix. Of all these, VIP Baccarat is the one that outranks in revenue all of the other games.
Another source of gaming revenue arises from betting on pari-mutuels and lotteries - a small fragment of the total gaming revenue generated.
Finally, online gaming operations are not yet licensed in Macau although all the indications that legislation has been drafted and studies conducted, not being likely to be enacted in the very near future.
Gaming regulation
Casino gaming operations are mainly regulated by Law no. 16/2001 (known popularly as the Gaming Law), which sets out the legal framework for games of fortune and chance in a casino, by Law no. 5/2004 which regulates gaming or betting credit concession by Casinos or Junkets and, in general, by the provisions of the Civil and Commercial Codes of Macau.
Junket activity is regulated by Administrative Regulation no. 6/2002 (amended by Administrative Regulation no. 27/2009) and is defined as the activity of promoting games of fortune and chance or other games in casinos to players, through the granting of facilities (transportation, accommodation, meals and entertainment) in return for a commission or other type of compensation by the gaming operator.
This activity can only be carried out by those licensed by the Gaming Inspection and Coordination Bureau for such purpose. By the end of 2010, the Gaming Inspection and Coordination Bureau had licensed 193 junkets, 155 being companies and, the remaining, 38 individuals.
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