The Macau Legislative Assembly has approved the final reading of a new legal framework set to enhance administrative powers to tackle gambling crimes.

The bill was first proposed by the SAR authorities in February of this year in a bid to promote ‘sustainable growth and enhance regulation within the casino gambling sector’, and includes higher penalties for activities such as illicit currency exchange in casinos, and increased investigation powers for security forces.

The approved law will help revise regulations enacted over 20 years ago as authorities urged the need to require updates to better define criminal offenses, optimize penalties, and enhance criminal investigation processes.

The definitions of several illegal activities were further clarified, including the definition of ‘parallel betting’ – where unauthorized bets by individuals (sometimes of exponential figures and whose GGR can’t be taxed) are conducted based on the outcomes of games on the premises of licensed casinos.

The new law also raises the penalty framework for crimes associated with illegal gambling and includes improvements to penal and procedural norms, such as optimizing accessory penalties and introducing criminal liability for corporate entities involved in illegal gambling.

The maximum penalty for these cases is currently three years in prison, but when the new regime comes into force, the maximum penalty will rise to eight years in prison. On the other hand, anyone who collaborates or participates in any way in the illegal gambling operation will face a prison sentence of up to three years.

During its evaluation at the Standing Committee level, legislators requested the administration better clarify the definition of what constitutes illegal gambling, citing, for example, if playing mahjong at home, in a restaurant, or playing cards in a garden, among other games, without government authorization, would be considered illegal gambling.

In its response, the Macau administration stated that illegal gambling involves profit motives, therefore playing mahjong at home without sharing profits or other profit-driven purposes will not be considered illegal gambling.

In a reply to a question by a legislator, Macau’s Secretary for Administration and Justice also clarified that the sale of lottery tickets by local businesses, such as the Mark Six, would continue to be considered an illegal exploration of gambling activities.

The Mark Six is a lottery organized by the Hong Kong Jockey Club and is highly popular in the neighboring SAR.

Longer pre-trial detention and undercover agents

Additionally, the new regime will also escalate penalties concerning illegal loans for gambling, with those convicted of this crime facing a prison sentence of up to five years. Previously, illegal loans were punishable by a maximum of three years in prison.

The law also includes provisions for undercover agents, creating a new protection regime for those who provide information or collaborate with the police in identifying criminals.

Furthermore, the provisions to prevent detainees under this law from communicating with anyone other than their lawyer were also added, with criminal investigators allowed to carry out nighttime residential searches between 9 pm and 7 am in certain crime cases.

In an intervention before the voting on Wednesday, legislator Chan Chak Mo, who headed the Standing Committee in charge of evaluating the bill, supported extending the maximum duration of preventive detention, arguing that longer investigation periods are necessary to prevent evidence destruction.

Those convicted of the crimes – specified in the law – may also be subject to ‘isolated or cumulative’ ancillary penalties, such as ‘expulsion or prohibition from entering the SAR for a period of five to 10 years’ for non-residents.

They may also be prohibited from entering certain establishments or places, from exercising certain professions or activities, or from holding public office. Each penalty can be applied for a period of two to 10 years.

This initiative followed separate amendments in 2022 to existing regulations governing casino operations, while a separate draft law exclusively concerning credit activities for gambling purposes enforced on August 1st of this year.

Illicit currency exchanges targeted

Under the new law, incurring in illicit currency exchange activities linked to gambling could lead to violators facing prison sentences of up to five years, targeting groups offering to exchange Hong Kong Dollars for other currencies – a common fixture in Macau IRs.

The legislation presumes that currency exchanges conducted within casinos are intended for gambling, encompassing all facilities dedicated to gambling and adjacent venues that offer related activities.

The proposed law defines the crime of ‘illicit currency exchange for gambling’ as engaging in currency exchange without legal authorization for the purpose of gambling, and clarifies that this excludes informal exchanges among family and friends. Legal operators—such as licensed banks and currency exchange businesses—are exempt from these restrictions.

Under the new regulations, if criminal investigations reveal illicit currency exchanges in casinos, operators will need to demonstrate that their exchanges are not intended for gambling.

Notably, the presumption does not extend to illicit exchanges occurring outside casinos unless there is substantial evidence, such as witness testimonies, linking them to gambling.

Importantly, Macau authorities clarified to legislators that clients who participate in these illicit exchanges will not face penalties, as requesting currency exchange from unauthorized operators does not imply intent to exploit the system for gambling purposes.

However, during the plenary session, legislator José Pereira Coutinho commented that the law does not address the root of the issue, stating that most informal currency exchanges for gambling purposes would likely just move outside casinos or resorts.

Legislator Coutinho also warned that these activities would continue since the number of legal currency exchange shops in the SAR was not sufficient to address demand, and their exchange rates remained high.