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Macau lawmakers embrace a new 10-year gaming law

Tuesday, the Legislative Assembly of Macau passed the city's new gambling law. As the present licences expire this year, the finalisation of the Act allows officials to begin the process of awarding new casino licences.

The new measure, adopted by the 32 present parliamentarians, would replace the statute in effect since 2001 and tighten the monitoring of SAR authorities in the city's gambling industry.

Under the new law, the number of new licences is restricted to six, and the duration of the new licences will be reduced from twenty to ten years. Macau regulators have the authority to penalise casino operators for a variety of offences, including revenue underperformance and threats to national security.

In addition, gaming taxes have been increased from 39 percent to 40 percent, comprising 35 percent in direct gaming taxes and a flat 5 percent tax for social welfare and urban development, an increase of 1 percent. As reported by Macau Business, the 5 percent indirect tax might be cut if operators are able to recruit more foreign players to their casinos.

In addition, casinos must now be located on premises owned by concessionaires; however, after a three-year transitional period, casinos on properties not owned by the concessionaire (satellite venues) may be operated by a management entity that can only receive management fees for site services and not a share of gaming revenue.

License holders will also be obliged to maintain a minimum registered capital of MOP5 billion ($618,7 million) for the term of their licence; concessionaire and anybody owning more than 5 percent of the operator's shares cannot directly or indirectly hold capital in another concessionaire.

The CE will evaluate the licensee's activities, its investment in non-gaming areas, and the Macau economy as a whole when determining the maximum number of tables and slot machines. A gaming concession might also be cancelled for endangering national security or failing to fulfil concessionaire responsibilities, such as timely tax payment, with the concession holder being required to surrender its gaming area/capacity to the government without compensation.

According to the law, casino operators will be required to develop a strategy to encourage responsible gambling, and there will be a limit number of gaming tables and machines each licence holder will be permitted to run. If authorised, casino operators would no longer have specific junket rooms, and revenue-sharing arrangements between the two parties would be outlawed. Additionally, approved VIP promoters would be limited to operate in just one concessionaire.

During its five-month review by the AL's second standing committee, a number of amendments were made to the first draught law, the most prominent of which included enabling satellite casinos to continue operating under new management company agreements and boosting indirect taxes. The second standing committee is also evaluating separate gaming laws regarding the economic relationships between gaming concessionaires, junket operators, sub-agents, and satellite casino operating corporations.

Beijing is urging the city to minimise its reliance on casino income and diversify into areas including as Chinese medicine, events, tourism, technology, and finance, among others. Concerned about the industry's role in aiding capital flight, China has intensified its assault on the enclave's high-stakes gambling business, with a new legislation imposing stringent limitations on its operations.

The modifications to the world's largest gaming hub are occurring against the background of a continuing tourism slump that is losing casinos millions of dollars every day. As reported by Bloomberg, gaming income has dropped as much as 97 percent during the epidemic and was still down 87 percent in May due to rolling lockdowns across mainland China, where the majority of Macau's gamblers originate.

It is anticipated that the city's six current concessionaires would have their licences extended until December while the new tender process is underway. On June 23, the government of Macau is anticipated to formally sign the six-month licence renewals.



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