Market update: Macau
I t is worth reminding ourselves that public policy of the Macau Special Administrative Region enshrined in the laws, especially after 1961, considers gaming an activity absolutely reserved for the State (Territory of Macau until 1999 or Macau Special Administrative Region after 1999). The corollary to this position is the concession regime under which the activity has been operated. It is quite common to hear both industry people and laymen alike talking about licenses when referring to the Macau gaming market. Such reference is not accurate and may lead to erroneous perceptions such as “license renewals” or even “concession renewals”. There are no licenses, only concessions, and there will be no renewals, just a fresh tender in which all players – even outsiders – will, theoretically at least, be starting from the same level. The current legislative and regulatory process is in full speed in Macau and may be summarized as follows: 1. Law 16/2001 (Macau Gaming Law) was amended by Law 7/2022, with effect generally as from June 23, 2022; 2. On that day, the concessions (and sub-concessions) were extended until December 31, 2022; 3. On July 1, 2022, the Administrative Regulation 28/2022, which amended the Administrative Regulation 26/2001, was published, with effect as from July 2, 2022; this Administrative Regulation establishes the rules for the grant of the casino gaming concessions, the concession contracts and the suitability and financial capacity requisites of the bidders and concessionaires. 4. Despite the current lockdown ordered by the Government to cope with the pandemic situation under the “dynamic Covid 0” national policy, it is expected that the Chief Executive will issue an order announcing the opening of the international public tender before the end of July, 2022. With the enactment of the Administrative Regulation 28/2022, the criteria which will govern the tender process are now clear. The criteria should be read in conjunction with the public policy statement amended by the Law 7/2022 in which the new article 1-A sets out that the aims of the regime of operation of casino games to be: safeguarding of national security and of Macau SAR; development of adequate diversification and sustainable development of the Macau SAR economy; operation of casino games conducted in a fair and honest manner; operation of casino games conducted free from criminal influence, in line with the policies and mechanisms of the Macau SAR in relation to the combat of illegal cross-border capital flows and prevention of money laundry; dimension and operation of casino games,
the practice of the games and entry into casinos subject to legal restrictions; persons involved in the supervision, management and operation of casino games are suitable for the office; and the interests of the Macau SAR in getting taxes resulting from the operation of the casinos are protected. The criteria established by the Administrative Regulation 28/2022 states that in selecting the bidders and assessing the proposals, the following factors should be considered: 1. Amount of the variable premium proposed; 2. Plans for expansion to attract clients from foreign markets; 3. Experience in running and operating casino games of chance or related activities; 4. Interest accruing to the Macau Special Administrative Region from investments in non-gaming projects; 5. Management plan of the casinos; 6. Proposal for supervision and prevention of illegal activities in casinos; 7. Social responsibility that the bidders intend to assume. When compared with the criteria established in 2001, we understand that only two of the points are partially common. This combined with the statement of public policy that the bidders should put in place a comprehensive proposal with a focus on non-gaming elements. 1 For a certain period of the Portuguese administration and, especially after the handover to the People’s Republic of China in 1999, the existence of gaming has never been consensual. Officials in both eras understood that they were not able to do without the revenue from gaming; hence, it was better to make the most of it and endow Macau with the income that the activity generates. At the same time, gaming was (and is) a form of guarantee of social protection and public education, and a tool to develop urban infrastructure, transportation, local industry and commerce, and education, as well as an expansion of tourism in Macau, and stimulation of economic and social development (higher salaries and level of employment). It is also clear for those who are familiar with Macau that the central government guidance of the last two decades calling for the diversification of the economy seems to have fallen on deaf ears. Patience, which is one of the great qualities of Asian cultures, is not infinite. Macau Governor Artur Tamagnini de Sousa Barbosa envisioned almost 100 years the policy that will take root, when he stated, in 1929: “We aspire to the substitution of certain forms of revenue – though they are common enough elsewhere, for we are anxious to do away with the revenue from such sources as, for example, the sale of opium, licensed lotteries, and fantan, cutting down such revenues gradually until they can be completely abolished.” 2
1 See Pedro Cortés and António Lobo Vilela, The Gambling Law Review: Macau, Law Business Research, May 9, 2002, available at: https://thelawreviews.co.uk/ title/the-gambling-law-review/macau 2 Hong Kong Daily Press, “Development of Macau. Administrative problems. Governor explains his policy”, December 9, 1929. Cited by Godinho, Jorge, OS
IMGL Magazine • July 2022 • 39
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