Macau Confirms New Gambling Laws Through Publication of Draft

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The publication of the final version of the draft gambling laws in Macau is a huge step forward. While the laws still need final approval, they offer clear insight into what’s coming and what will be expected of casino operators. Among the many changes, more attention to responsible gambling and social programs are expected.

Macau Finalizes Updated Gambling Laws

The publication of the draft bill follows a Friday press conference at which the government provided clarification on key issues. The government confirmed that six concessions would likely be granted in the wake of the upcoming retendering for casino licenses. Each concession would last for ten years, with the possibility to extend for up to three years in exceptional circumstances.

The government will request concessionaires to collect a 5% tax from all junket commissions as a further blow for the junket sector. Although such a provision is already in Law 16/2001. However, subsequent chief executives have requested a lower rate than 1% withholding tax. The full 5% withholding tax will likely be added to future bills if the amended law is passed.

The bill allows concessionaires to operate a maximum number of gaming tables and machines per year. Macau’s Chief Executive will closely monitor business volume to establish a minimum annual gross income for each gaming table or gaming machine. The city’s leader can reduce the number of machines that are allowed to be used if the minimum annual income is not met for at least two consecutive years.

Corporate Social Responsibility to Receive Increased Attention

No longer will raking in millions from the casino floors be the primary focus. Macau expects casino operators to significantly target Corporate Social Responsibility (CSR) initiatives going forward. The city will require operators to support small- and medium-sized enterprises (SME), the diversification of local industries, increased workers’ rights, and the hiring of disabled people.

They will also need to be prepared to invest in “educational, scientific and technological nature, environmental protection, culture and sports” programs.

Every three years, concessionaires will be subject to a review by the Macau Gaming Inspection and Coordination Bureau. This will assess general contractual compliance. Any concessionaire that fails to adhere to the terms of their contracts or is not proactive in complying with them will be referred by the Secretary for Economy & Finance.

That compliance review will be gauged, in part, by an annual report the operators will now be required to provide. This covers CSR activity, as well as responsible gaming solutions the operator has developed.

Junkets Will Need to Rethink Their Business Model

The revised gambling laws also contain additional details regarding the future of junkets. Revenue-sharing arrangements between casino concessionaires and junkets will also be prohibited by the gaming law amendments.

These prohibitions are actually contained in the new bill. It prohibits gaming promoters from “[sharing], in any form or agreement, with the concessionaires, the revenues from the casinos, or the exclusive exploitation of the areas reserved for the casinos by contract, being limited only to the provision of support to the concessionaires in the promotion of gambling activities in casinos, through commissions.”

The Secretary of Economy and Finance has made a significant change in policy. He will continue to issue junket licenses for approved VIP promoters, but will limit each licensee to “only promote games in one concessionaire.” This is a stark contrast to years past when major junkets operators had dedicated VIP rooms or multiple rooms in all six concessionaires.

It also prohibits gaming junkets or similar third-party entities “except in circumstances deemed necessary” by their partners, employees, or members of the management team.

Macau’s legislation still has to give its final approval of the rules. This is expected to happen within two months, which means there may not be extensions granted to the existing casino concessions.

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