Macau gaming law: what next?

by JORGE A. F. GODINHO

Assistant Professor, Faculty of Law, University of Macau
jgodinho@umac.mo[Macau Business, June 2008] Some years have elapsed since the approval of the key milestones in Macau gaming law: first the 2001 law that opened the new era, then in 2002 the law on gaming promoters, followed in 2004 by the law on credit for gaming. In 2006 new regulations against money laundering were passed, in the context of a broader reform.
On the back of this renewed legal framework, a total transformation of the Macau gaming landscape was jumpstarted and is underway, leading to tremendous development. In any event, over the years some questions have been accumulating, while new ones have been raised.
The first issue is the ‘classic’ matter of market access. In 2001, the law mentioned three concessions, which were granted in 2002. Subsequently three subconcessions were awarded, and it has remained unclear whether other subconcessions would appear. In addition, other arrangements known as profit sharing agreements have existed for many years; as late as 2007 one such contract was announced, in that case for the Macau Studio City, which appears to have been the last one that received official approval.
Where will this all end? This was answered recently by the Chief Executive: all market access has been frozen, although doubts have been raised as to the very detailed implications. One thing is clear: no more gaming concessions will be awarded for the foreseeable future. This is the right decision. It it time to build and finish all announced projects, and on the legal front a clean up of the confusing picture made of 3+3 sub/concessions plus sharing arrangements is needed, so that intelligibility is brought to the system.
Another problem, also visible in the preceding matter, is a degree of lack of clarity. The Gaming Inspection Bureau (DICJ) does not publish some of its regulations, with the exception of the anti-money laundering regulations. The regulations on slot machines or on minimum internal control requirements are not accessible to the public. Why?
Regarding online gaming, the issue has been informally mooted on and off and is continuosly speculated about in conferences: is anything going to happen?
Regarding money laundering control, as mentioned, Macau moved various steps forward with the 2006 reforms, which included the creation of a financial intelligence unit (FIU). However, it may be remarked that actually there are two FIUs. One, the general one (known as GIF), is about to release data regarding 2007, its first full year of operation, as was disclosed in a conference in May. There will be data available on suspicious transaction reports, and it seems that the gaming sector has been relatively active in this regard, producing upwards of 300 reports in 2007. The interesting question will be to determine how many reports were done by casinos and how many were done by gaming promoters.
The other, sectorial, FIU is actually the gaming inspection (DICJ), which has been collecting data on all transactions above HKD/MOP 500.000 since November 2006. It would be interesting to see DICJ release some aggregate statistics regarding the data that it has collected.
The criminal laws related to gaming date to 1996 and generally seem to be holding well the test of time. However, one important reform is needed: side betting, an issue that was prominently mentioned recently, should be clearly considered as a crime. Currently it is doubtful whether it can be considered as a crime under Law 8/96/M, which forbids taking parallel bets inside casinos, or unlawful lending or loansharking, being highly debatable whether side betting can be classified under either of these offences. Side betting can of course lead to administrative law consequences and revocation of licenses to those involved. However, as side betting is primarily an offence against the fiscal interest of the SAR, it should be criminalized in no uncertain terms.
One very positive development was the creation of a consultative council in 2007 which has been tasked with the study, follow-up and presentation of proposals on relevant topics. It met for the first time in May 2008 and provides an institutional platform for consultation and discussion of new initiatives in the field. It is hoped that it becomes an open forum, as all stakeholders expect transparency, from financial markets to those whose main task is to deal with the downside of gambling.
Regarding proposals and policies on problem gambling, a matter of increasing concern in the community, work is being conducted in the Institute for Welfare Service regarding hotlines, counselling and therapy. Perhaps the time has come to consider the enactment of rules on exclusion programs.
Finally, the next major area that should be opened to competition is sports betting.

Date Posted: 14-Jun-2009

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