Macau Lawmakers Consider Gambling Law Amendments, Prepare for Final Reading

Posted: March 23, 2022, 7:10 a.m.

Last update: March 23, 2022, 01:03 a.m.

Macau continues to advance its efforts to update local gambling laws. The committee reviewing them completed another reading this week, with another revision coming next month.

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

Macau is one step closer to completing major gambling law reforms that could significantly change how casinos in the Chinese SAR operate. A Legislative Assembly committee tasked with reviewing and helping clarify the new rules and regulations just wrapped up another round of discussions on the changes this week.

There is still work to be done and additional government input is needed. Chan Chak Mo, the chairman of the committee, explained that it will probably happen 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 review of the gambling bills confirms the planned adoption of rules that would require satellites to be in properties owned by one of the six concessionaires.

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

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

Many of them could simply close as soon as the new rules come into effect, which could be later this year or early next year. If that happens, say labor groups, there will be sudden and potentially irreversible job losses.

However, this is not a strong enough argument to maintain the current status quo. Lei Wai Nong, Macau’s economy and finance secretary, reiterated to government officials yesterday that unemployment concerns are exactly the reason Macau is willing to grant satellites the three-year grace period.

It is possible that the grace period becomes five years. Lawmakers are considering the possibility, although nothing concrete is yet in place to extend the deadline.

Confusing language on denial of concession

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

This is why the persistent mention of an operator having failed to obtain a new concession this year is puzzling. The subject resurfaced this week in the legislative committee.

A gaming operator that does not receive a new concession will have to dissolve its gaming operations. However, according to an update from last week, he will be able to continue any non-gaming activity.

There is also a contingency related to concessions regarding company liabilities. Although this is still under discussion and could change, more people associated with a casino operator will be responsible for the finances of that entity.

Shareholders holding more than 5% of the company, corporate officers or persons exercising a management function of the concessionaire must personally guarantee the liability of the operator. This includes backing up all game chips in circulation.

It raised eyebrows for being out of step with the norm. It could also be a potential break with Macau’s commercial code. However, the government says the change is necessary to cope with Macau’s changing infrastructure.

The Gambling Law Committee plans to spend the first three weeks of April doing a final review of the bills. He will consider comments he has requested from lawmakers and other government officials during this time.

Afterwards, he will present the final draft to the Legislative Assembly. If everything stays on track, Macau will approve the new laws by June 26. This, the committee says, is a realistic goal.