The enforcement of gaming debts in Macau
by Jorge A. F. Godinho

The enforcement of gaming debts in Macau

Jorge A. F. Godinho
Assistant Professor, Faculty of Law, University of Macau (jgodinho@umac.mo)

Gaming raises legal issues from various perspectives and disciplines, including namely administrative law, company law, contract law, tax law and criminal law. The contract law point of view addresses the question of deciding in which cases do gaming and betting arrangements create valid and judicially enforceable legal obligations.
Legal systems have usually looked with some suspicion to gaming and betting for money, as these are traditionally seen as potential sources of a wide array of social problems, if not outright as evils to be avoided. This attitude is somehow visible in the regulation in force in the 1999 Macau Civil Code, which is similar to that of many other legal systems within the civil law tradition. The regulation separates three possibilities (art. 1171 Civil Code); gaming and betting may be: (a) a source of standard enforceable civil obligations; (b) a source of ‘natural obligations’; (c) not valid and consequently not enforceable.
The first result — valid and enforceable obligations — arises when specific laws so provide. It is therefore necessary for other specialized laws to expressly provide that the obligations arising from certain forms of gaming and betting are judicially enforceable; in the absence of a clear provision to this effect, they are not claimable and, accordingly, courts will not discuss the merits of such cases. The only case where Macau law currently provides expressly to this effect is, from 2004, in the context of credit for gaming, which is a separate contractual issue from gaming as such.
Valid civil obligations are also created in the case of sports competitions: art. 1171 of the Civil Code states that they generate civil obligations for those taking part in the sports event. Accordingly, participants can enforce the obligations arising from the result of the competition; enforcement may be directed namely against other competitors or against the organizers of the competition (e.g., if a prize promised has not been paid). Parties other than the participants do not have this possibility, and fall under one of the two other categories of cases.
The default contract law rule is that lawful gaming and betting is a source of ‘natural obligations’. This is a general category or type of obligations; the more important cases of natural obligations are debts arising from gaming and betting, and also debts for which the period of limitation of actions has been reached. The key characteristic of natural obligations is that, while they cannot be judicially enforced, any payments made are recognized as valid and do not have to be refunded. This somehow paradoxical regulation reflects a mixed attitude by the legal system: the law does not want courts filled with legal claims arising from gaming but, on the other hand, it does recognize that gaming exists and that there is a moral duty for the loser of a game or bet to pay the amount due, as promised. This regulation, which is similar to that of many other legal systems, represents the traditional cautious attitude towards gaming.
The problem of course is that while this traditional rule does make sense for gaming and betting outside of casinos or other forms of commercial legalized gaming, such as games played among family and friends, it seems questionable in the context of the gaming industry. The traditional rules on natural obligations, if they were understood to apply in full to the gaming industry, could theoretically be taken to mean for example that a gaming operator would be able to refuse the payment of a jackpot or other payout due under the rules of any particular type of legalized gaming or betting arrangement. This, of course, would be perceived as a scandal. However, in such event, certainly this would be a rare case in Macau where customary law could be successfully invoked: casinos and other gaming concessionaires do regularly make payments, and do so out of a sense of legal obligation. Courts would most probably affirm that, in the context of the legalized gaming industry, the custom is that gaming and betting generate judicially enforceable obligations. For this reason, there is probably not a very pressing need to legislate to the effect that debts arising from gaming and betting in legalized and regulated establishments generate civil obligations; in any event, the possibility of such legislative change has been reported in the press. It certainly would be a welcome and positive development of Macau gaming law.

Date Posted: 02-May-2005

Assistant Professor, Faculty of Law, University of Macau (jgodinho@umac.mo)

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