Macau's gambling laws finally formalized

It has been a fraught period for casinoconcessionaires in Macau. The Special Administrative Region (SAR) surely did not make it very easy when it comes to whether everyone actually understands what is happening on the legislative side.

First, it was said that junkets would go, and then – satellite casinos. But then, after a closer look at the industry, satellite casinos were saved at least for the time being. None of the vicissitudes of the legal process stopped Macau’s Legislative Assembly from coming up with a final vote on the new gambling laws for the industry this Tuesday and this is definitely good news.

It took lawmakers two hours to arrive at a vote that was passed with an overwhelming majority (32-1), with the new gambling framework visibly pleasing the SAR’s legislators. What’s next for Macau is to put up the concessionaire licenses for a tendering process.

Macau was originally supposed to do this June, but delays came as lawmakers weren’t sure how long it would take them to actually figure out the new framework. Without a final draft, it would be hard to negotiate anything substantial with casino concessionaires, and rightly so.

So, lawmakers found a better way – to make more money. They offered all concessionaires a six-month extension and all six will now run their operations through December 31, 2022, after paying a solid extension fee. They will all participate in the new tender though. Meanwhile, a number of important matters regarding legislation were settled this week.

Concessionaires may now have their 5% levies calculated on gross gaming revenue (GGR) reduced, but this would in no way be an exemption from the 35% gaming tax that they are obligated to pay. The 5% reduction will be triggered at the behest of Macau and it will only come in those cases when the SAR is experiencing a major economic challenge, such as the most recent shutdowns that have paralyzed the gambling industry, and all businesses for that matter.

Legislators are openly trying to steer Macau away from gambling as one of its mainstays and are hoping to see better involvement from tourist businesses. To boost tourism, for the gambling industry and other economic activities, the government will focus on overseas outreach, but this does not include China.

The government in Beijing has been reluctant to continue feeding the SAR with mainlanders eager to gamble. The Chinese Communist Party has been actively looking to guilt citizens into not making the crossing with Macau to gamble. In many cases, it has worked.

The new laws also touch on social responsibility, satellite casinos, and everything that is important to gambling operating successfully. The reality is that tourists will have to bring in the bulk of the SAR’s GDP, one way or another.

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