Macau lawmakers warn over VIP model

Macau, casino, regulation

Legislators in Macau are warning the government that the changes to Mainland Chinese national security laws may make it impossible to operate VIP rooms under the current legislation in place in the SAR.

The Legislative Assembly Follow-up Committee in charge of Land and Public Concessions made the statement in its final report, published early August.

“The entry into force, on March 1st of 2021, of the proposal to revise the penal code of the People’s Republic of China (…) the control of money outflows and the fight against organising the participation in gaming activities outside the country, is of great alarm to the gaming sector of Southeast Asia and the whole world,” notes the report, indicating that the rules “will make it difficult for VIP rooms to continue their operating methods.”

Beijing has drawn up numerous blacklists of countries targeting its nationals for gambling and is questioning Chinese punters they believe to be leaving its borders to gamble. While this has caused concern regionally, most analysts have said they believe that the measures are more likely to impact Southeast Asian jurisdictions such as the Philippines, and are not targeting Macau.

The committee also made suggestions to further oversee the gaming sector, pointing in particular to electronic gaming machine regulations and the overall number of these machines allowed.

It also suggested that the government “reinforce the management of the system and how gaming is operated”, including a push for law revisions “regarding the operating model, social responsibility and proportion of activities.”

It also suggested that the government look towards the integration of digital currencies, given the “increasing trend.”

Macau authorities have previously stated that they are not looking into applying digital currencies, such as the digital Yuan, in the city’s casinos – despite suggestions that the move could improve oversight and cut down on currency outflows from the mainland.

The review also suggested measures ahead of next year’s re-tendering process including pushing for concrete measures so that “big companies drive little ones”, meaning operators would have to give priority to local SMEs when acquiring goods and services, support young entrepreneurs and “Made in Macau” products and increase their investments in non-gaming and SMEs, aiming to have more of Macau’s “diverse culture” in their properties.

The committee further suggests that the law revisions include criteria for social responsibility, employee promotion, environmental protection, neighbourhood assistance and responsible gaming.

In regards to the upcoming tender itself, the committee insists that the government establish a timeline, after officials have maintained that it will carry out the public consultation on the gaming law revision within the second half of 2021.

They note that the re-tendering process “doesn’t necessarily have to take place before the contracts come due”, in June of 2022, and that the government needs to “choose the best relative date for carrying it out” or be “obliged, without other alternatives, to admit some applicants with unsatisfactory conditions”.

It wasn’t clarified whether these conditions related to the applicants themselves or the overall tender process.

It urged for the number of licenses in the future public tender to be “set as soon as possible”, to “avoid confusion” as well as suggesting that other elements could be introduced into gaming operations, such as sports betting “to explore sources of international clients”.

Although already under considerable pressure ahead of the June 2022 expiration of the concessions, the committee suggests that the government carry out another study of the gaming industry’s development, to better understand its “advantages and disadvantages, correctly define the positioning of the sector and maintain its regional competitiveness”.

All of the suggestions were submitted to the Secretary for Economy and Finance as well as the head of Macau’s gaming watchdog and are being sent to the president of the Legislative Assembly, all of its lawmakers, and the government.