Gaming Law 2022 Comparisons

The Macau gaming industry was significantly impacted by the COVID-19 pandemic and by the tightening of travel and border policies. These measures, albeit very successful from a public health perspective, have drastically reduced the number of visitors to Macau and the region’s gross gaming revenue. While travel restrictions remain in place, it remains unclear when the gambling market will resume a growth trajectory. Concurrently, the government announced a public tender to award six ten-year casino concession contracts. They will replace the existing concessions, which end on 31 December 2022, and are poised to introduce new terms and conditions for the operation of casino games of chance in Macau. Importantly, the new concessions will contractualise significant investment obligations from the casino concessionaires, particularly in non-gaming amenities and attractions. These investments, together with a policy drive to attract visitors from markets other than mainland China, may contribute to re-shape Macau’s business model towards a more leisure-oriented offer, appealing to a wider demographic of tourists.

The year 2022 was marked by the enactment of the Amendment to the Gaming Law (Law 7/2022), the first since the Gaming Law (Law 16/2001) was passed more than 20 years ago. Since its enactment, the Gaming Law set out the framework for awarding casino concession contracts in the post-monopoly era and formed the legal framework for Macau to become the most successful casino gaming destination in the world.

The Amendment to the Gaming Law was published in the official gazette on 22 June 2022 and entered into force the following day. It introduced significant changes to the policy goals for the industry. The new goals are reflective of the different scale and maturity of the gaming sector, as well as the development of Macau’s economy and society in the 20 years that have passed since the Gaming Law was enacted. The new policy direction also addresses concerns raised at the national level with matters such as national security and cross-border capital flows. In implementing such policies, the Amendment to the Gaming Law brings about a vast array of changes. For instance, it introduces a series of new provisions aimed at regulating the size and development of the industry: prohibition of sub concessions, limitations on the number of tables and slots, mandatory junket exclusivity to one concessionaire, phase out of the satellite casinos, prohibition of revenue share with third parties, etc. These measures may have a profound impact on the feasibility of secondary industry players (eg, satellite casinos and junkets) and, together with more stringent suitability thresholds and new supervision and enforcement mechanisms, can contribute to the development of a more sustainable, although perhaps smaller, gaming sector.

Following the enactment of the Amendment to the Gaming Law, the Public Tender Regulation for the award of casino concession contracts (Regulation 26/2001), was also amended by Regulation 28/2022, paving the way for the opening of the public tender to award new casino concession contracts.

Court Decisions

On 19 November 2021, the Macau Court of Final Appeal (TUI) issued a ruling, which confirmed the decision upheld by the Macau Second Instance Court that a casino concessionaire is jointly liable for certain obligations of a gaming promoter (also referred to as a “junket”) vis-à-vis a player.

Following this decision, in 2022, TUI issued similar rulings in several court cases related to the deposit of gaming chips, involving junkets and casino operators and determining that the casino operators are jointly and severally liable for certain activities performed by the gaming promoters in their casino’s premises. These decisions established an important legal precedent since they have determined the liability of a casino operator over the activities pursued by junkets. Ultimately, these decisions have influenced the drafting of a bill under discussion at the Macau Legislative Assembly entitled the “Legal Framework for Operating Games of Chance in Casinos” (the Bill).

The Bill aims to regulate the activity of those involved in the operation of casino games of chance, including concessionaires, gaming promoters (“junkets”), collaborators (sub-agents), and casino management companies. In its current draft it includes provisions addressing the joint and several liability of casino concessionaires for the compliance of certain obligations of gaming promoters and other industry players.

Update on Measures Related to COVID-19

Macau follows the “Dynamic zero-COVID” policy pursued by the mainland China authorities. This policy is implemented through a mix of border and travel restrictions, aimed at preventing the virus from entering Macau, and of public health measures aimed at controlling the spread of the virus within the community.

A seven-day quarantine, followed by three-days of “self-management”, is currently required for all individuals entering Macau from places other than mainland China. Arrivals from mainland China are generally not subject to quarantine (except for individuals who have been present in areas that are considered of risk) provided they exhibit a negative PCR test.

The gaming regulator has also issued a series of guidelines and instructions aimed at ensuring a safe and healthy environment within Macau’s casinos. The following are currently in effect:

•       all individuals who intend to enter a casino resort will be subject to body temperature checks and are required to present a valid Macau health declaration statement;

•       the use of face masks is mandatory for employees and patrons alike;

•       a prescribed minimum distance must always be maintained; and

•       a table game may only allow three or four people to bet simultaneously, and all players should be seated at least one seat apart.

According to guidelines issued by the Macau Health Bureau, casino operators' staff must undergo COVID-19 testing every seven days as they are considered a population group with high risk of contracting COVID-19 at work.

Online gaming, known as “interactive gaming” under the Gaming Law, can only be operated commercially by private entities that have entered into a concession contract with the Macau government to that effect.

However, the Macau government has never issued regulations governing the concession and operation of online gaming (and has not launched a tender to grant these concessions). Additionally, concessionaires of casino games of chance cannot operate interactive games.

The limitations listed here are applicable to all forms of gaming identified in 3.2 Definition of Gambling.

The exclusive operator of horse racing wagering (Macau Horse Racing Company Limited, or MJC) and the current operator of sports betting (Sociedade de Lotarias e Apostas Mútuas de Macau, or SLOT) can offer online wagering limited to the land-based competitions they already offer.

The commercial operation of casino gambling in Macau is statutorily reserved for the Macau government and may only be pursued by privately owned entities that have been granted a concession to that effect, by entering into a contract with the Macau government.

Betting

Macau allows betting on horse races. This activity may only be operated by entities that have been previously granted a concession to that effect. Their licensing and operations are governed by several executive orders issued by the CE and by the relevant concession contract. This activity has been historically carried out on an exclusive basis by only one operator, the MJC.

Macau also allows the placing of bets in sports competitions, namely in football (soccer) and basketball. Sports betting has been historically undertaken on an exclusive basis by only one operator, SLOT. However, SLOT’s concession contract was amended, and since 1 June 2021 the conducting of sports betting operations is no longer exclusive.

Poker

Poker qualifies as a game of chance (see the "Casino" section below). The following are the current authorised forms of poker:

•       3-card poker;

•       5-card poker;

•       football poker;

•       Q poker;

•       stud poker;

•       Texas hold 'em poker;

•       fortune 3-card poker; and

•       Omaha poker.

Bingo

Bingo is not currently approved as a game of chance and cannot be offered in Macau casinos or other gaming venues.

Casino

The sale of games of chance (either table games or electronic gaming-machines) may only be carried out at casinos (except in the cases described in 5.1 Premises Licensing). Games of chance are defined as those in which the outcome is contingent, as it depends exclusively or predominantly on the player's luck. A casino concessionaire may only offer games of chance that have been approved by the Macau Secretary for Finance and Economy (SEF). The following is the current list of games of chance that may be offered in Macau casinos:

• 3-card baccarat;
• baccarat;
• blackjack;
• baccarat “chemin de fer”;
• boule;
• craps;
• cussec;
• casino war;
• dozen numbers;
• fantan;
• sap i chi or 12-card game;
• 13-card game;
• mahjong;
• mahjong baccarat;
• mahjong paikao;
• mini paikao;
• pachinko;
• paikao;
• fish-prawn-crab;
• 3-card poker;
• 5-card poker;
• football poker;
• Q poker;
• lucky wheel;
• roulette;
• stud poker;
• super pan 9;
• Taiwan paikao;
• makccarat;
• Texas hold 'em poker;
• fortune 3-card poker;
• fortune 8; 
• dragon/phoenix; and
• Omaha poker.

Gaming Machines

An electronic gaming machine (EGM) is statutorily defined as a device (including the gaming programmes and associated software, the memory compartment, the random generator and any means of gaming software storage) that is both:

• fully or partially operated by electric, electronic or mechanical means; and
• conceived, adapted or programmed to operate a game of chance and to pay prizes (in cash, gaming chips, redeemable tickets or other values) resulting from the placement of wagers on the games that it offers.

All gaming machines and electronic table games (ETGs) must be authorised by the Gaming Inspection and Coordination Bureau Macau (DICJ). They must also comply with the Macau published standards (including the EGM and ETG Technical Standards) and compliance must be certified by a recognised gaming testing laboratory. Only manufacturers or distributors previously licensed by the DICJ can supply or distribute gaming machines in Macau.

Lottery

The operation of lotteries in Macau is permitted both in the form of instant lottery and in the form of a Chinese lottery, popularly known as "pacapio". Instant lotteries are operated on a non-exclusive basis by SLOT. The Chinese lotteries are operated on an exclusive basis by Sociedade de Lotarias Wing Hing, Limitada (Wing Hing).

Gambling Legislation

The main legislation regulating land-based gaming in Macau is the Gaming Law (Law 16/2001 amended by Law 7/2022), which sets out the legal framework for the commercial operation of a variety of gaming products, with a particular focus on the commercial operation of casino games of chance.

Other relevant legislation applicable to land-based gaming includes:

• the Instant Lottery Law (Law 12/87/M), which governs the concession and operation of instant lotteries;
• the Horse Racing and Pari-mutuel Betting Regulation (Order 163/90/M);
• the Illegal Gambling Law (Law 8/96/M), which criminalises the unlicensed supply of gambling;
• the Illegal Animal Racing Law (Law 9/96/M), which criminalises certain actions and behaviours in respect of horse racing wagering;
• the Horse racing online wagering instruction (Dispatch of SEF 63/2003);
• the Gaming Credit Law (Law 5/2004), which regulates the granting of credit for gambling by casino operators and gaming promoters;
• the Gaming Promoters Commissions’ Regulation (Regulation 27/2009), which imposes certain limitations on the commissions paid to gaming promoters;
• the Gaming Promoters' Regulation (Regulation 6/2002), subsequently amended by Regulation 27/2009, which governs the licensing and activities of gaming promoters;
• the Electronic Gaming Machines (EGMs) Regulation (Regulation 26/2012), which regulates the supply of electronic gaming machines, equipment and system and sets out the licensing framework for EGM manufacturers and suppliers;
• the Gaming Participation Law (Law 10/2012), subsequently amended by Law 17/2018, which regulates the conditions of entry, working and gambling in casinos;
• the DICJ By-laws (Regulation 19/2021);
• the Public Tender Regulation for the award of casino concession contracts (Regulation 26/2001), subsequently amended by Regulations 34/2001, 4/2002 and 28/2022, which sets out the rules for the public tender procedure for the award of casino concession contracts, the requirements for concession contracts, the financial and suitability requirements of bidders and concessionaires, and how these requirements can be verified;
• the Specialised Commission for the Gambling Sector By-laws (CE Dispatch 38/2010 and Regulation 32/2022), which is the body responsible for assisting the CE in defining gaming policy; and
• the CE dispatch that determines the maximum number of total gaming tables and EGMs permitted to operate in Macau (CE Dispatch 161/2022) as well as the CE dispatch that determines the minimum annual gross gaming revenue of each gaming table and each EGM (CE Dispatch 162/2022) for the purpose of calculating the special premium to be paid by a casino concessionaire in a particular year, if any.

DICJ Instructions

In addition, the DICJ issues instructions (including some that are not publicly available) that are binding on the entities that it supervises, including:

• casino concessionaires;
• gaming promoters;
• the sports betting concessionaire;
• the horse racing concessionaire;
• lottery concessionaires;
• casino management companies and service providers; and
• EGM manufacturers and suppliers.

The DICJ's relevant instructions include those addressing:

• technical standards for ETGs (Instruction 2/2014);
• anti-money laundering and counter-terrorism financing (Instruction 1/2016), amended by Instruction 1/2019;
• Macau jackpot and casino management system technical standards (Instruction 2/2016);
• dealer-operated ETG technical standards Version 1.0 (Instruction 1/2017);
• card shufflers and electronic card shoes (ECS2) technical standards version 1.0 (Instruction 5/2019);
• Macau gaming certificate format (MGCF) Version 1.0 (Instruction 1/2020);
• technical standards for EGMs (Instruction 1/2021);
• the activities of gaming promoters; in particular, regarding prohibitions on performing settlement transactions unrelated to Macau or the use of Macau as a settlement platform for foreign transactions and other limitations; and
• data protection matters related to restrictions on the transfer of players' personal data to third parties, or any entity in or outside Macau, which are imposed on casino concessionaires and gaming promoters.

Gambling is generally defined by reference to the play of games of chance. These are defined as those games of chance in which the outcome is contingent, as it depends exclusively or predominantly on a player's luck. Statutory definitions of other forms of gambling include:

• “Operations offered to the public”, defined as those in which the expectation of winning lies exclusively on chance (for example, lotteries, raffles and lucky draws).
• “Pari-mutuel betting”, defined as a form of betting on animal races or sports competitions in which the winners divide the pool of wagers among themselves (deducted from commissions, fees and taxes) in proportion to the amount individually bet.

There is no statutory definition of land-based gaming. Generally, land-based gaming refers to the commercial operation of casino games of chance (either in the form of table games or electronic gaming machines) or to other legal forms of gaming in which players physically place their bets or wagers in locations previously authorised for this purpose. Please see 5.1 Premises Licensing.

Online gaming is referred to as “interactive gaming” and defined as the play of games of chance that meet the following criteria:

• offer a prize, in cash or in kind, that can be won in accordance with their respective rules;
• players participate by means of telecommunications (including telephone, fax, the internet, data networks and video or digital data transmission) and make, or agree to make, payments in cash or in kind to play the game; and
• they are offered in Macau casinos in the form of table games or gaming machines.

The Illegal Gaming Law (Law 8/96/M) criminalises the unlicensed supply of games of chance. It prohibits all forms of operation, promotion or assistance of gaming by unlicensed entities or individuals, or outside the areas that have been approved as casinos or gaming areas, as well as fraudulent gaming in approved areas and the extension of credit to players by unlicensed entities or individuals.

Depending on the nature of the crime, penalties can range from fines to imprisonment for up to eight years. Accessory penalties include prohibition from entering casinos, apprehension, and reversion to Macau of all gaming materials and monies or items of value used in illegal gaming. The Illegal Gaming Law qualifies certain actions and behaviours as misdemeanours, the penalties for which are pecuniary fines that range from MOP300 to MOP10,000 (about USD40 and USD1,240). Law 9/96/M criminalises offences related to animal races. Depending on the specific crime, penalties vary from fines to imprisonment for up to three years.

There is currently a bill under discussion at the Macau Legislative Assembly (see 1.2 Recent Changes). The Bill aims to regulate the activity of those involved in the operation of casino games of chance – including concessionaires, junkets, collaborators (sub-agents), and casino management companies – as well as implement an improved mechanism for ensuing the suitability and supervision of these individuals.

The Bill is expected to be enacted by 2023.

The CE is the authority that is ultimately responsible for:

• determining gambling policy; and
• licensing and regulating gambling activities in Macau.

The CE is assisted by the Specialised Commission for the Gambling Sector, which is the body responsible for studying the development of the gaming sector and for providing support to the CE in defining gaming policy and regulation and in proposing supervisory measures and other guidelines for the gaming sector.

DICJ is the regulatory body responsible for the oversight of all forms of permitted gambling. It operates under the SEF. DICJ is responsible for the regulation, supervision, and coordination of all gambling operations and activities. It is also responsible for assisting in defining and executing economic policies for the gambling industry.

Macau adopts a prescriptive approach to regulation. However, there are specific guidelines issued by the DICJ that adopt a more risk-based approach

For recent and forthcoming changes, please see 1.1 Current Outlook.

The commercial operation of gambling in Macau is statutorily reserved for the Macau government. To offer any of the legally allowed gambling products in Macau, a private entity must be granted a concession to that effect, by entering a contract with the Macau government.

Casino Gaming

A concession for the operation of games of chance in casino may only be awarded following a public tender launched by the CE. In July 2022, a public tender was opened to award six casino gaming concession contracts.

Sports Betting

Betting on football (soccer) and basketball is offered, on a non-exclusive basis, by only one operator, SLOT.

Horse Race Betting

Betting on horse races is offered on an exclusive basis by the MJC.

Lottery

The operation of lotteries in Macau is permitted both in the form of instant lottery and in the form of a Chinese lottery, popularly known as “pacapio”. Instant lotteries are operated on a non-exclusive basis by SLOT. The Chinese lotteries are operated on an exclusive basis by Wing Hing.

Licences are not readily available in Macau. In order to operate any of the legally allowed gaming activities in Macau, an entity must be awarded a concession contract.

A concession for the operation of games of chance in a casino may only be awarded following a public tender launched by the CE. In July 2022 a public tender was opened to award six concession contracts. It is expected that, such contracts be awarded for a ten-year duration, commencing on 1 January 2023, and ending on 31 December 2032.

Pari-mutuel betting and Chinese lotteries are permitted in exclusivity to the MJC and Wing Hing concession contracts. Sports betting is granted on a non-exclusive basis by means of a concession contract with SLOT.

In accordance with the Amendment to the Gaming Law, the maximum duration for casino concession contracts has decreased from 20 years to ten years. The concession may be extended, one or more times, up to a maximum of ten years if granted for a shorter period. The maximum duration of a concession may be extended beyond the ten-year term, one or more times, for a maximum of three years. An extension may only be granted under exceptional circumstances under a justified decision of the CE.

The concession contract for SLOT was renewed in 2021 for a period of three years, ending on 5 June 2024. The MJC concession contract was renewed in 2018 and will end on 31 August 2042. The concession contract for the operation of the Chinese lotteries has been renewed on an annual basis since 2010 with the current term ending on 31 December 2022.

Concessionaire Requirements

Only joint-stock companies (sociedades anónimas) incorporated under the laws of Macau, with a minimum share capital of MOP5 billion (approximately USD620 million) are eligible for the award of a casino concession contract. At least 15% of the share capital of a casino concessionaire must be held by its managing director (administrador-delegado), who must be a permanent resident of Macau.

A casino concession contract may only be granted to a private entity following a public tender process.

A tender commission, appointed by the CE, is responsible for overseeing the public tender and to produce the final report that will support the CE’s decision on the award of the concession contracts.

The Public Tender Regulation, the tender opening dispatch (issued by the CE) and the tender programme are the key documents that define, amongst others: (i) the tender process, (ii) the eligibility criteria and the information that must be disclosed by the bidders, (iii) the proposal elements and requisites, (iv) the awarding criteria, (v) the terms and duration of the concession contracts and (vi) the amount and form of the tender bond.

In the context of an application, the bidding company, its directors, and key employees, as well as the companies or individuals holding 5% or more of its share capital, are subject to a suitability investigation aimed at assessing their experience, reputation, probity and financial soundness.

Concession Criteria

According to the tender programme, the awarding criteria are as follow:

• Proposed variable premium.
• Plans for attracting foreign players.
• Experience in the operation of casino games of chance.
• Relevance of the proposed investment plans in gaming and non-gambling.
• Casino management plans.
• Proposal to monitor and prevent illegal activities in casinos.
• Corporate social responsibility programme.

There is no legally specified length for the public tender procedure. The first public tender procedure in 2001 took three to four months from the Macau government's launch of the public tender until the announcement of the gaming concessions on 8 February 2002. However, the ongoing public tender is expected to finish before 31 December 2022.

The bidders must provide a security deposit for admission to tender in the minimum amount of MOP10 million (about USD1.24 million). The costs incurred in the probity check and financial background investigations required during the bidding process will be deducted from the security deposit.

Games of Chance

Casino concessionaires are subject to the payment of an annual premium comprising a fixed and a variable portion. The fixed portion is set in the respective concession contracts. The variable portion is set in respect of each concessionaire taking into consideration the number of casinos it operates and its location, the number of tables and of gaming machines and the type of games operated, and other relevant criteria that Macau Government may determine. According to the CE Dispatch 161/2022, the total number of gaming tables and gaming machines in Macau will be limited to 6,000 and 12,000 respectively.

In addition to the annual premium, the latest amendment to the Gaming Law introduced a special premium, based on a minimum annual revenue per each gaming table and each slot machine set at MOP7 million and MOP300,000 respectively (about USD865,790 and USD37,120), as determined by CE Dispatch 162/2022. The special premium is payable if the average annual gross revenue of a concessionaire per gaming table and per slot machine (calculated based on its maximum number of authorised tables and slots) falls below the minimum annual revenue determined by the CE. The amount of the special premium is the difference between the two figures. Effectively, this amendment establishes a mandatory revenue floor and, consequently, a minimum tax due by each concessionaire.

Instant Lotteries

The annual fee payable by the instant lottery’s operator is levied as a percentage of the total annual revenue with a minimum annual amount of MOP1 million calculated as follows:

• MOP1 million if the annual gross revenue is below MOP10 million;
• if the annual gross revenue is between MOP10 million and MOP30 million, 12% of the excess;
• if the annual gross revenue is between MOP30 million and MOP45 million, 13% of the excess;
• if the annual gross revenue is between MOP45 million and MOP60 million, 14% of the excess;
• if the annual gross revenue is between MOP60 million and MOP80 million, 16% of the excess;
• if the annual gross revenue is between MOP80 million and MOP100 million, 18% of the excess; and
• if the annual gross revenue is more than MOP100 million, 20% of the excess.

Sports Betting

The sports betting operator must pay a minimum annual fee of MOP6 million calculated as follows:

• MOP6 million if the annual gross revenue is below MOP30 million;
• if the annual gross revenue is between MOP30 million and MOP40 million, 22% of the excess;
• if the annual gross revenue is between MOP40 million and MOP50 million, 24% of the excess;
• if the annual gross revenue is between MOP50 million and MOP60 million, 26% of the excess;
• if the annual gross revenue is between MOP60 million and MOP70 million, 28% of the excess;
• if the annual gross revenue is between MOP70 million and MOP100 million, 30% of the excess; and
• if the annual gross revenue exceeds MOP100 million, 25% of the excess.

Chinese Lotteries

The operator of Chinese Lotteries must pay:

an annual concession premium of MOP500,000;

an annual rent that is levied at 23% of the total gross revenue; and

additional contributions comprised of 5% for the Macau Foundation and 1% for the Macau Montepio Oficial.

Horse Racing

The operator of horse race wagering must pay an annual fixed amount of MOP15 million and a variable amount of tax levied on the total annual amount of the bets registered in the “totaliser” calculated as follows:

between MOP2.5 million and MOP3 million, a tax of 0.5% is applicable;

between MOP3 million and MOP3.5 million, a tax of 1% is applicable;

between MOP3.5million and MOP4 million, a tax of 1.5% is applicable;

between MOP4 million and MOP4.5 million, a tax of 2% is applicable; and

above MOP4.5 million, a tax of 2.5% is applicable.

The operation of casino games of chance may only take place within premises authorised as casinos by the CE, after hearing the Specialized Commission for the Gaming Sector. There are some exceptions to this rule, notably the slot-machine parlours known as “Mocha Clubs”.

The Gaming Law defines a "casino" as a place authorised by the CE for gambling purposes. For this effect, the CE will take into consideration criteria such as the urban planning of Macau and its impact to the community to classify and authorise any given premises as casino. These specific places may be located within a resort, hotel or other multipurpose location. However, there are some specific conditions under which gaming may be permitted outside casinos, for example, in vessels, aircrafts and at the Macau International Airport.

The operation of gaming tables and machines within casinos are limited to the areas for gambling. Within those gambling areas it is foreseen the possibility of reserving areas for certain players only.

Please see 1.1 Current Outlook. For the recent changes to the land-based gambling sector, please see 1.2. Recent Changes.

Issues around B2C licences do not arise in Macau as no concessions for online gaming have been granted; see 2.1 Online.

Issues around B2B licences do not arise in Macau as no concessions for online gaming have been granted; see 2.1 Online.

Issues around the regulation of affiliates do not arise in Macau as no concessions for online gaming have been granted; see 2.1 Online.

Issues around the licensing and regulatory requirements applying to white-label providers do not arise in Macau as no concessions for online gaming have been granted; see 2.1 Online.

There are no expected changes to the online gaming regime in Macau.

Issues around technical measures to protect consumers from unlicensed operators do not arise in Macau as no concessions for online gaming have been granted; see 2.1 Online.

The Gaming Participation Law established the legal framework of the conditions for entering, working in, and playing, at a casino, by:

• imposing the minimum age of 21 years to enter or work in a casino;
• providing for a self-exclusion and a third-party exclusion programme; and
• addressing the treatment of the winnings of people not allowed in casinos.

It also prescribes that the employees of a casino concessionaire, when off duty, are prevented from entering casinos. This restriction extends to certain employees not directly involved with gaming operations, such as food and beverage outlet workers, cleaning and surveillance personnel.

Pursuant to the Amendment to the Gaming Law, casino concessionaires must develop their own responsible gaming programme and periodically revise and improve it. These responsible gaming programmes must include, amongst others, measures to promote responsible gaming behaviours, to assure compliance with exclusion measures, to set up a working group to provide support to problem gamblers and to promote training and support to employees.

For forthcoming changes, it is expected that DICJ will issue new guidelines for responsible gambling.

Casino concessionaires must set up adequate control procedures to ensure compliance with the statutory restrictions on participation, while the DICJ has implemented self-exclusion and third-party exclusion procedures.

The current anti-money laundering regime was introduced by Law 2/2006 (amended by Law 3/2017) and further complemented by Regulation 7/2006 (amended by Regulation 17/2017). This legislation is further complemented by DICJ Instruction 1/2016 (subsequently amended by DICJ Instruction 1/2019).

The Amendment to the Gaming Law introduced as a policy goal that the operation of casino gaming is conducted in compliance with the policies and mechanisms for curbing illegal cross-border capital flows and for preventing money laundering and terrorism financing. This goal directly addresses the concerns, expressed at National level, with the outbound flow of funds for gaming purposes, in breach of mainland China’s capital controls (estimated at USD150 billion a year), and the raise of such concerns to a level of national security. New regulations and AML guidelines are expected to achieve this goal.

Obligations

Under the applicable anti-money laundering regulations, the casino concessionaires, gaming promoters and other gaming concessionaires must comply with a comprehensive set of obligations aimed at preventing money laundering activities within the gaming sector. These include:

• customer due diligence obligations;
• enhanced monitoring of the play by politically exposed persons (PEPs);
• identification and reporting of suspicious transactions;
• the refusal of transactions when mandatory information is not provided; and
• proper record-keeping.

Regulatory Authorities

The Macau Financial Intelligence Office is the entity responsible for receiving and processing reports on cash transactions and suspicious transactions. The DICJ is responsible for supervising and enforcing the gaming industry's compliance with its anti-money laundering obligations.

Macau Economic Services Bureau (MES) is the government agency responsible for supervising and enforcing the Advertisement Law.

Advertisement is defined as any marketing activity aimed at promoting the acquisition of goods or services by the public.

In Macau, the Advertising Law (Law 7/89/M) introduced the key legal provisions regulating gambling advertising. The Advertising Law was further complemented by a set of interpretative instructions issued by the MES in respect of the advertisement of gaming.

The Advertising Law prohibits any type of marketing activity that depicts games of chance or their play as the essential elements of the advertisement. In addition, casino concessionaires may only publicise any activities related to the play of games of chance within the gaming areas of casinos.

The prohibition of gaming advertising is complemented by a set of instructions issued by the MES. These instructions are interpretative of the scope and extent of the prohibition. They detail the types of advertising activities that are considered to fall under the prohibition by the MES and provide practical examples of such activities. The prohibition applies to all types of marketing conducted in Macau and encompasses games of chance played both offline and online. However, it does not appear to cover other forms of gambling, such as sports betting and lotteries.

Advertising Law stipulates monetary fines ranging between MOP2,000 and MOP12,000 for individuals (about USD250 and USD1,500) and MOP5,000 and MOP28,000 for corporations (about USD620 and USD3,500).

There are no recent or forthcoming changes in advertising regulation.

A casino concessionaire or a shareholder holding 5% or more of its share capital (a “Qualified Shareholder”) must obtain a pre-authorisation from the SEF for the following:

• transferring or encumbering the concessionaire’s shares or rights relating to these shares;
• assigning voting rights or other shareholding rights;
• transferring any real estate property of the concessionaire or any of the concessionaire’s credits above a threshold to be defined in the respective concession contract; and
• entering credit facilities or similar agreements in excess of a threshold to be defined in the respective concession contract.

Furthermore, cross-shareholdings are subject to statutory limitations. A casino concessionaire, as well as a Qualified Shareholder, are prohibited from directly holding any shares of another casino concessionaire, and from indirectly holding 5% or more of the share capital of another casino concessionaire.

A casino concessionaire must also inform DICJ whenever any of its Qualified Shareholders: (i) is, or becomes, publicly listed; and (ii) is, or will be, operating casino games of chance in another jurisdiction.

Please see 10.1 Disclosure Requirements.

Please see 10.1 Disclosure Requirements.

The DICJ is the body responsible for the enforcement of laws and regulations governing the activities of gaming concessionaires. In performing such duties, DICJ has public authority powers and may request the support of police agencies and other government bodies. DICJ may open investigations, present charges and apply sanctions to gaming concessionaires, casino management companies, gaming promoters and other entities and individuals under its supervision, in respect of breaches of their legal and regulatory obligations, including breaches of DICJ’s own instructions and guidelines.

The DICJ may apply monetary fines as well as other ancillary sanctions, such as the temporary closure of gaming areas. DICJ’s decisions are appealable to the SEF. The powers to suspend, terminate or take over (temporarily or definitively) a gaming concession, including by breach of law or contract, lie solely with the CE.

The following are DICJ key duties and powers:

• co-operate in defining, co-ordinating and executing gaming sector policies;
• ensure that the gaming concessionaires' activities and other individuals and entities that are subject to gaming-related legislation, as well as the relationship between them and the public, are in accordance with best interests and Macau legislation;
• collaborate in the elaboration and improvement of legal provisions within the scope of the DICJ’s responsibilities, as well as to issue instructions for gaming concessionaires, casino management companies, gaming promoters and other individuals or entities subject to gaming-related legislation;
• supervise the activity of gaming concessionaires, their management companies, gaming promoters and other individuals or entities subject to gaming-related legislation, particularly regarding compliance with their legal, regulatory and contractual obligations, as well as the DICJ’s instructions;
• supervise the suitability and the financial soundness of gaming concessionaires, their management companies, gaming promoters and other individuals or entities subject to gaming-related legislation;
• supervise the different types of game activities;
• supervise compliance with gaming-related legislation;
• supervise the gaming revenues, including gross gaming revenue (GGR) and other revenue provided for in the legislation or in the concession contracts;
• carry out research work related to gaming;
• issue licences to carry out the activity of promoting games of chance in a casino;
• regulate the activity of supply and inspection of gaming machines and respective equipment and systems;
• approve the equipment, systems and utensils assigned by the concessionaires to the exploitation of the respective concessions;
• encourage the collaboration of concessionaires, their management companies and gaming promoters with the policies of the Macau government and with the fulfilment of social responsibilities;
• promote, co-ordinate and execute responsible gaming promotion activities; and
• perform other duties assigned by law.

The DICJ’s director may apply financial penalties as well as other ancillary sanctions, such as the temporary closure of gaming areas. DICJ’s decisions are appealable to the SEF. The powers to suspend, terminate or take over (temporarily or definitively) a gaming concession, including by breach of law or contract, lie solely with the CE.

Financial penalties range between MOP100,000 (approximately USD12,000) and MOP5,000,000 (approximately USD618,000). The specific amount of the penalty is determined by the type of infringement, its materiality, the damages resulting from the infringement, the culpability of the violator, and the benefits it attained (taking into account its economic situation and prior behaviour).

There are no sanctions personal in nature. Pursuant to the Amendment to the Gaming Law, a Qualified Shareholder of a casino concessionaire is jointly liable for the payment of financial penalties applied to a casino concessionaire in respect of its gaming activities.

There are no recent updates relevant to social gaming.

Esports have been gaining a growing presence in Macau. Some existing gaming operators have partnered with third parties to organise esports events. Wagering in Esports is not authorised.

There are no recent updates relevant to fantasy sports.

There are no recent updates relevant to skill gaming.

Blockchain or cryptocurrency technology are not specifically regulated in Macau. Consequently, there are no relevant recent legal trends.

Casino concessionaires are subject to a special gaming tax, levied over their gross gaming revenue at a rate of 35%. In addition, casino concessionaires are also subject to the following mandatory contributions:

• there will be a contribution of 2% of gross gaming revenue to a state-run foundation, responsible for the promotion, development and research in the areas of culture, science, social studies, economics, education, academia and philanthropy; and
• there will be a contribution of 3% of gross gaming revenue towards urban development, tourism promotion and social security.

Although casino concessionaires are legally required to pay profit tax (known locally as complementary tax), they have historically been exempt from paying it under CE orders issued under the Gaming Law.

The concessionaires are also subject to the payment of an annual premium and special premium. For more details, please see 4.10 Ongoing Annual Fees.

For expected sector developments, please see 1.1 Current Outlook. For changes in the legislations, please see 1.2. Recent Changes and see 3.7 Pending Legislation.