MACAU GAMING LAW
to some of them, which I will briefly explore.
implies the free and unencumbered transfer of all casinos of the concessionaire, along with all their equipment and furnishings, as well as any other assets or rights that are required to revert at the end of the concession pursuant to the law and the concession contract (Article 47.3, applicable ex-vi Article 48.2 Amended MGL). 8 Apart from the threats involving such matters that are explicitly referenced in article 1.º-A of the MGL, such as over-reliance on the gaming industry or involvement with organized crime, there are two main areas of concern: cybersecurity risks and political risks related to Sino-American Relations. Macau casinos handle vast amounts of sensitive customer data, including finacial details and personally identifiable information (PII). Data breaches can lead to identify theft and financial fraud, not only affecting individuals but also potentially compromising national security by exposing vulnerabilities in the financial system. These can in turn be leveraged by hostile actors seeking to undermine national security through cyber warfare tactics. As geopolitical tensions rise, especially between China and the US, Macau casinos may become targets for cyber espionage which can either compromise strategic economic interests or expose weaknesses in critical infrastructure. Macau’s legal framework of national security Macau’s Basic Law, which acts as its constitutional framework, determines in its Article 23.º that “The Macau Special Administrative Region must produce laws that prohibit any act of treason against the Motherland, secession, sedition, subversion against the Central People’s government and the theft of State secrets, laws that prohibit foreign political organizations or associations from carrying out political activities in the Macau Special Administrative Region and laws prohibiting political organizations or associations in the region from establishing ties with foreign political organizations or associations.”
Objective 2 appears as the second most important objective and embodies the political guidelines issued by the PRC’s Central Government that Macau must not be over reliant on its gaming industry and promote a healthy economic diversification of its economy. Objective 4 links to Macau’s reputation as having been deemed to facilitate capital flight, allowing illicit funds to be moved offshore, undermining China’s strict capital controls. Capital controls capped at US$50,000 annually per individual are a bid to stabilize the currency and prevent excessive capital flight. However, they also lead individuals and businesses to seek ways to circumvent the restrictions, resulting in illegal outflows with casinos presenting opportunities for money laundering. The Chinese government views illegal capital cross-border flows not only as an economic issue but also as a significant national security risk. As a result, authorities have implemented stringent measures to monitor and control these flows, aiming to safeguard the country’s financial system and maintain stability. 7 One immediate effect of the newly established primary objective was the need for the legislator to amend provisions concerning the termination of gaming concessions. Article 45 previously titled “Extinction” foresaw different manners by which a gaming concession could terminate, whether by expiration, agreement between the Government and the concessionaire, redemption, or termination either by breach or reasons of public interest. With the introduction of the concept of national security the legislator had to amend and add a new cause of extinction of concessions. Thus, article 45 was amended and re-titled “Termination and Extinction”. Unsurprisingly in its list of termination triggers, national security is listed first, reflecting the legislator’s view that it is the most important and severe cause for termination. Unlike the termination for reasons of public interest, a termination due to threats to national security or the MSAR
7 Measures against junket promoters, triads, underground banks, and satellite casinos are all components of a strategy to curb capital outflows. The arrest of Alvin Chau Cheuk Wah in January 2023, who as head of the biggest Macau junket, Suncity, was reported to have moved US$ 250 billion annually at the peak of his operations, symbolizes the shift undertaken by Macau authorities. More recently, the newly approved Law on Illegal Gambling Activities (Law 20/2024) as greatly helped reduce illegal foreign exchange activities, with as much as 11,000 money changers having been arrested in 2023 (https://stevevickersassociates.com/news/sva-update-political-risks-in-china-viewed-through-a-macau-prism). 8 See Article 47.º-A.2: The termination of the concession for reasons of public interest grants the concessionaire the right to fair compensation, the amount of which must be calculated with particular regard to the remaining time until the end of the concession term and the investments made by the concessionaire. There is no entitlement to compensation when termination occurs due to breach of obligations or lack of suitability.
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IMGL MAGAZINE | MARCH 2025
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