MACAU BUSINESS
“There needs to be a discussion to find solutions and face difficulties in the process (how concessionaires and satellite casino managing entities will
comply with that regulation)” Zeng Zhonglu
revoked. In the new proposal, threats to the national security and to the security of the Macau SAR can be a reason to terminate the licenses. Safeguarding national security is listed as the first aim of the new law, in article 1, followed by promoting adequate diversification and sustainable development of the SAR. Junket operations are also covered by this bill. Each gaming
promoter will only be allowed to operate with one gaming concessionaire. And as mentioned by André Cheong, junkets will not be allowed to engage in revenue-sharing arrangements (third party scheme) with concessionaires or to operate certain areas or facilities in casinos. They will only be allowed to provide services to concessionaires through a commission arrangement. In addition, an annual minimum gross revenue limit will be set via Chief Executive dispatch for each gaming table and slot machine held by gaming concessionaires, with the new operators having to pay a special premium if they do not reach that amount, the gaming law proposal draft indicates. The predicted amount of gross gaming revenue will be calculated in accordance with the maximum number of gaming tables and slot machines authorised for the concessionaire, also a new requirement added in the draft.
Game changer
Some legal experts point out that, generally speaking, the content of the gaming law amendment bill signals a break with the past and a game changer in several ways, as it introduces several changes to the legal and regulatory framework in effect since Law No. 16/2001 – “legal framework for the operation of games of chance in casinos” – came into force. Legal expert António Lobo Vilela worked in the Government
team in charge of drafting the law back in 2001, and also as an advisor to the Commission of the first public tender to grant casino concessions.
“The draft is a game changer to the extent that finally the Macau Government approaches seriously the diversification of the economy and its sustainable development, limiting the industry in terms
of weight in the economy” Pedro Cortés
22 MARCH 2022
Mr Lobo Vilela, who served as an advisor to the Secretary for Economy and Finance between 2016 and 2020, underscores that the bill, which he considers to be “poorly drafted”, indicates “a cut with the past” by shifting the focus away from development to readjustment in terms of the industry size. “We had a development phase, and we are now going to witness an adjustment phase that is set to be translated in the downsizing of the industry”, said Mr Lobo Vilela.
Another Macau-based lawyer, Pedro Cortés, managing partner of the law firm Rato, Ling, Lei & Cortés, considers the draft a “game changer to the extent that finally the Macau Government approaches seriously the diversification of the economy and the sustainable development, limiting the industry in terms of weight in the economy”. However, Mr Cortés, who has been doing research on the industry and publishing legal articles on gaming-related matters, questions whether this is the best approach “given the current status of the economy”. For Mr Cortés, the increase of the duties of the concessionaires
and oversight of the government are the main takeaways of the bill and were already present in the consultation document. This is reflected in provisions such as the interim review every three years of the concessionaires’ accomplishment of the contractual obligations. “The increase of social responsibility of the concessionaires – not that they haven’t been corporate responsible in the past – with a specific provision for that purpose seems to be also very important for the sustainable development”, Pedro Cortés adds while stressing that “another main feature that should be praised is the fact that responsible gambling is now elevated to law in line with other golden standard jurisdictions”. He also regards the stricter suitability criteria of those involved on the industry as “a point to be applauded”. Mr Lobo Vilela notes that the bill contains a number of positive
features for the industry. Firstly, the bill unclouds the horizon. Another positive feature highlighted by Mr Lobo Vilela is the adoption of the long-awaited administrative infraction regime as well as the provision on gaming chips, although even more important would be to set minimum reserves for the outstanding gaming chips, he notes. However, Mr Lobo Vilela raises a critical point concerning what is mentioned in Article 50 regarding the dissolution of the concessionaires. The gaming legal expert says “it doesn’t make sense to require the dissolution of the companies when they fail to secure a concession, as a change of business scope of the firm would serve the same purpose, but worst than that is the legal aberration of the provision stating that qualified shareholders and directors are jointly liable for all debts of the concessionaire including the gaming chips in circulation”. This, according to the lawyer, “attempts against the very nature of a company, which is to limit the liability of their shareholders”.
The case for clarification
A need for further clarification on how several provisions in the proposed gaming law draft bill will be enforced in the future is expressed by Macau-based scholars. “Overall speaking, my impression on this draft bill is that it
stresses on strengthening the supervision of the industry as a whole, and chopping down the most socially/administratively controversial segment (i.e. the traditional junket operator-run VIP gaming activities and gambling rooms) associated with the practice of Macau’s casino gaming industry,” University of Macau´s
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