Under proposed amendments to Macau’s new gaming law, all contracts between junket operators and casinos in the city would be subject to approval by the secretary for economy and finance, and future changes would require the sanction of the Gaming and Inspection Bureau (DICJ).
According to Macao News, the legislative assembly’s second standing committee must review the terms at least twice before agreeing on a final version of the law.
Legislator Andrew Chan Chak Mo, chairman of the committee, agreed that the secretary for economy and finance should approve the “important issues.” He said the DICJ would “ask” the secretary to review amendments to junket contracts, but the secretary would not make the final decision.
According to the proposed bill, the maximum percentage of commissions that gaming operators could pay the junkets would continue to be stipulated by the secretary. The percentage currently is limited to 1.25 percent for rolling chip turnover.
Asked whether the maximum percentage could be raised, Chan said the government has no plans to lower its gross gaming revenue tax and gaming concessionaires would “live a poor life” if the junkets’ commission was further increased.
He added that the interests of the junket operators and the gaming concessionaires must be balanced, given the government’s stance on the gross gaming revenue (GGR) tax. According to the law, the tax amounts to 35 percent of the concessionaires’ GGR, while the concessionaires’ additional “contributions” and other mandatory payments amount to up to 5 percent of the gross gaming revenue.
Meanwhile, according to Macau Business, the consultant for Sociedade de Jogos de Macau (SJM), Rui Cunha, says that gaming in the Chinese territory is entering “a different cycle” and must align with Beijing’s national policy and interests.
“Macau cannot be detached from the interests and overall policy of China,” said Cunha, a lawyer and consultant for SJM, the oldest gambling operator in the special administrative region.
Gaming accounts for about 80 percent of government revenues and 55.5 percent of the SAR’s GDP with an industry that employs more than 80,000 people (17.23 percent of the working population). In 2019, some 40 million people visited Macau, and casino revenues peaked at MOP292.4 billion (US$36.1 billion).
“It was a cycle that has closed and now we will enter a different cycle, better or worse,” the lawyer said, adding that “there may be a need to make some corrections” in Macau’s No. 1 industry, keeping in mind that “Macau is part of China.”
Rui Cunha said it’s “not very possible that there will be a boom” in the city’s gaming sector again, especially with China’s order that the economy diversify beyond casinos.
Among other changes, the amended gaming law, now under review by parliament, would grant 10-year licenses—half the previous term—and prohibit subconcessions. The new regulations are being considered as the city’s first 20-year gaming concessions come to an end.
