Macau’s Gaming Industry Undergoes Transformation with Stricter Regulations and Shift to Mass-Market Tourism

The evolving regulatory landscape in Macau’s gaming sector reflects a shared vision between the governments of China and Macau to transform the city into a tourism destination that prioritizes mass-market revenues over the VIP junket-driven segment. A study by researchers at the University of Macau argues that achieving this ambitious goal requires a balanced approach to joint liability for casino concessionaires—one that promotes meaningful oversight of junket activities without imposing excessive liability for actions beyond their control.

According to the study, stricter regulations on deposits and increased limitations on gaming promoters’ activities in recent years are part of a broader strategy to reform the industry. Notably, gaming revenue from mass-market baccarat reached MOP137.9 billion ($17.2 billion) in 2024, surpassing pre-pandemic levels recorded in 2019. Meanwhile, VIP baccarat revenue lagged behind at MOP54.7 billion ($6.8 billion), accounting for just 40 percent of its 2019 levels and making up 24 percent of total gross gaming revenue (GGR) for 2024.

The study, conducted by João Ilhão Moreira and Yudi Zhou, professors at the University of Macau’s Faculty of Law, focuses on the shifting liability framework within Macau’s gaming industry since 2021. It particularly highlights the joint liability of casinos in deposit disputes involving junket operators, intermediaries historically responsible for attracting high-rolling VIP players and providing complex financial services like deposit-taking.

High-profile cases of embezzlement and insolvency, such as those involving Suncity and Dore, have raised serious concerns about civil liability for lost deposits. In response, recent court rulings, particularly by Macau’s Court of Final Appeal, have clarified the responsibilities of casino concessionaires under new legislative reforms.

Macau’s Gaming Law (Law No. 16/2022), a landmark regulatory overhaul, prohibits junket operators from independently offering deposit services and establishes a robust framework for joint liability. This law criminalizes unlawful deposit-taking and enforces stricter oversight to combat financial misconduct.

According to the study, these legislative changes have significantly reduced the autonomy of junkets, making them increasingly reliant on casinos to manage patron funds. Moreover, the updated regulations hold casinos jointly liable for administrative fines and civil liabilities resulting from junket activities conducted on their premises unless they can prove diligent oversight.

“This underscores the need for robust monitoring mechanisms and places a significant compliance burden on concessionaires to mitigate risks,” the researchers emphasized.

The legal reforms have also introduced greater clarity regarding when deposits made to junkets qualify as casino-related activities. This has resolved numerous disputes over deposits not returned by junket operators, reducing ambiguity around concessionaire liability and incentivizing better oversight of junket operations.

“The reforms aim to alleviate the financial risks for concessionaires associated with ongoing disputes regarding deposits not returned by gaming promoters,” the study notes.

The researchers argue that these regulatory shifts align with Macau’s broader goals of enhancing transparency and accountability while transitioning toward a more mass-market tourism model. The joint efforts by the governments of China and Macau are intended to create a safer and more transparent gaming environment while reducing reliance on the VIP junket-driven market.

“Ultimately, the stricter regulations on deposits within Macau’s gaming industry, coupled with increased limitations on gaming promoters’ activities, reflect a shared vision between China’s and Macau’s governments for a transformed gaming sector,” Moreira and Zhou stated.

“These efforts aim to align Macau’s gaming industry with the broader goal of becoming a tourist destination increasingly reliant on mass-market revenues rather than the VIP junket-driven segment.”

As Macau continues to transform its gaming industry, the findings emphasize the importance of carefully calibrating joint liability frameworks to encourage effective oversight without overburdening concessionaires. Through this approach, the city aims to achieve its vision of a redefined gaming sector aligned with its mass-market tourism objectives.

By fLEXI tEAM