Macau Legislators Review Gaming Law Amendments, Prepare for Final Reading

Posted on: March 23, 2022, 07:10h. 

Last updated on: March 23, 2022, 01:03h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Macau continues to advance its efforts to update local gambling laws. The committee charged with their review wrapped up another reading this week, with another revision coming next month.

Macau casinos
Macau’s casino scene is going to evolve rapidly this year. The government is close to finalizing the city’s new gambling laws. (Image: Bloomberg)

Macau is a step closer to completing major gambling law reforms that could significantly alter how the Chinese SAR’s casinos operate. A Legislative Assembly committee responsible for reviewing and helping clarify the new rules and regulations just completed another round of discussions of the changes this week.

There is still more work to be done, and additional input from the government is needed. Chan Chak Mo, the president of the committee, explained that this will likely happen sometime next month. At that time, the final draft could be ready for presentation.

Casino Satellites in Macau Still on the Chopping Block

Satellite casino operators need to start preparing for alternative business opportunities. The revision of the draft gambling laws confirms the planned adoption of rules that would force satellites to be in properties owned by one of the six concessionaires.

The satellite operators will have three years from the start of the new concessions to work out a deal with casino licensees. However, procrastinating until the end of the period will make reaching an agreement more difficult. There are a total of 18 satellite casinos in Macau, of which 14 operate under SJM Holdings’ license. Three have ties to Galaxy Entertainment, and the last operates through a partnership with Melco Resorts and Entertainment.

Labor groups are concerned about the changes to satellite operations. They have conveyed their apprehensions to the Legislative Assembly and local media, expressing their belief that the changes could lead to a considerable increase in unemployment.

Many of those could simply shut down as soon as the new rules take effect, which could be later this year or the beginning of next year. Should that happen, the labor groups explain, there will be sudden and potentially irreversible job losses.

That’s not a strong enough argument to keep the current status quo, however. Lei Wai Nong, Macau’s Secretary for Economy and Finance, reiterated to government officials yesterday that the unemployment concerns are exactly why Macau is willing to give satellites the three-year grace period.

There’s a chance the grace period could become five years. Lawmakers are considering the possibility, although nothing concrete is in place yet to extend the time frame.

Perplexing Language over Concession Refusal

Macau’s six casino concessionaires have collectively been a main provider of revenue for the city’s economy. Generally speaking, with only a few exceptions over the years, they have operated responsibly and professionally.

This is why the continued mention of an operator being unsuccessful in receiving a new concession this year is perplexing. The subject surfaced again this week in the legislative committee.

A gaming operator who fails to receive a new concession will have to dissolve their gaming operations. However, per an update from last week, it will be able to continue any non-gaming activity.

There is also a contingency tied to concessions regarding company liabilities. While this is still under discussion and could change, more individuals associated with a casino operator will be responsible for that entity’s finances.

Shareholders who hold more than 5% of the company, company directors, or those operating in a managerial capacity of the concessionaire will have to personally guarantee the operator’s liabilities. This includes backing all of the gaming chips it has in circulation.

That has raised eyebrows for being out of step with the norm. It could also be a potential break from Macau’s Commercial Code. However, the government states that the change is necessary to deal with Macau’s evolving infrastructure.

The gambling law committee expects to spend the first three weeks of April making a final review of the draft laws. It will consider the feedback it has requested from legislators and other government officials during that time.

After, it will present the final draft to the Legislative Assembly. If everything stays on track, Macau will approve the new laws before June 26. This, the committee asserts, is a realistic goal.