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The main legal and regulatory framework for casino gaming, pari-mutuels and operations offered to the public comprises the following.
Pursuant to the Gaming Law, the Chief Executive, by means of an administrative Regulation, determines the rules and specific conditions under which the operation of games of chance is permitted outside casinos (aboard vessels and aircrafts and, restricted to gaming machines, in Macau International Airport). However, no administrative Regulation has been enacted, nor has the MSAR authorised any operation of games of chance outside casinos.
Although no greyhound racing concession is currently awarded (the last expired on 20 July 2018) the above-mentioned legislation is still in force.
No legal framework has ever been enacted.
The Chief Executive has the highest executive power in relation to gaming matters, which can also be exercised by the Secretary for Economy and Finance, either directly or pursuant to a delegation of powers, and the DICJ.
The oversight of gaming is, prima facie, the responsibility of the DICJ, the regulatory authority of all types of permitted gaming, a department within the government structure and under the Secretariat for Economy and Finance, entrusted with the responsibility of assisting in the definition of the public policy of the gaming sector and its execution, as well as for the regulation, supervision and coordination of the operation and gaming activities.
The DICJ's main powers (as established by Administrative Regulation No. 19/2021 of 21 June 2021), include:
The Macau Gaming Commission is a consultative body of, and presided over by, the Chief Executive with the responsibility of formulating policies and facilitating the development of Macau's casino gaming and relevant regulatory framework. It is expected that its role be more active when the amendments to the Gaming Law are enacted.
The Financial Services Bureau, under the Secretariat for Economy and Finance, is also vested with regulatory powers concerning, in particular, the accounting of gaming operators and gaming promoters. Concurrently with the DICJ, it may determine an extraordinary audit to a casino gaming operator or a gaming promoter.
The Judiciary Police, under the Secretariat for Security, has a special unit with exclusive powers to investigate gaming-related crimes committed in casinos or other gaming venues or their surroundings.
The Financial Intelligence Office, under the Secretariat for Security, created to collect, analyse and disseminate information to the relevant authorities concerning AML & CTF, is responsible for receiving and processing suspicious transactions reports filed by gaming operators and gaming promoters.
The Social Welfare Bureau and the Health Bureau, both under the Secretariat for Social Affairs and Culture, handle problem gambling issues and supervises the casino smoking ban, respectively.
To date no laws or regulations on the operation of interactive gaming have been enacted. As several times announced by the government, interactive gaming seems to not be a topic on the table for consideration any time soon, in part due to the sensitive political issues it raises.
Casinos are defined under the Gaming Law as places and premises authorised and classified as such by the government. The use of 'casino' is reserved for casino operators, which can only, in accordance with the draft law proposal, operate casino games of chance in properties wholly and directly owned by them.
Also under the draft law proposal, all casinos must identify and clearly demarcate the following areas:
Exceptionally, casino gaming operators may be authorised to explore operations offered to the public.
Although against the principle of games of chance confined to casinos, the gaming machines regulation allows for casino operators to open slot machines centres.6
Private entities may be granted a concession for the operation of interactive gaming.
Casino gaming operators cannot operate any interactive games and the interactive gaming concessions are by law autonomous and separated from the casino gaming concessions.
As yet, no regulation on interactive gaming has been enacted, and public policy tends not to encourage this type of gaming.
These restrictions do not prevent Macau residents from registering on online gaming platforms or websites located overseas. To the best of our knowledge, no plans to implement measures to curb residents' access to such platforms or websites exist.
The Gaming Machines Regulation establishes the legal regime for supply of gaming machines, as well as the requisites for gaming machines and equipment and the gaming systems.
Gaming machines, equipment and systems to be installed in Macau casinos are subject to a technical assessment by the DICJ under the requirements established by the Regulation. In addition, several instructions with technical standards have been issued on electronic gaming machines (EGMs), card shufflers and shoes, dealer-operated ETG, jackpot and CMS, and ETG.
The latest EGM technical standards (version 2.0) state:
Manufacturers of gaming machines, equipment and systems must be licensed, and suppliers must obtain authorisation from the DICJ to conduct their business in Macau. Manufacturers and their qualified shareholders (holding 5 per cent or more of the share capital) and directors are subject to a suitability assessment process by the DICJ. Manufacturers licensed in certain major gaming jurisdictions (Nevada, New Jersey, Mississippi, Australia, New Zealand, the United Kingdom and Singapore) may submit a formal request to waive this procedure.
Qualified shareholders (holding 5 per cent or more of the share capital) of the applicants to a gaming concession, as well as their respective directors and key employees, shall be found suitable under a suitability assessment process. Casino operators must remain suitable during the concession period.
Suitability requirements are also applicable to gaming promoters and their qualified shareholders (holding 5 per cent or more of the share capital), directors and key employees.
However, as to key employees (casino and gaming promoters), no order of the Secretary for Economy and Finance to determine the relevant functions for the purpose of ascertaining who should fall under that category was ever enacted. Nonetheless, the draft law proposal defines as key employees the members of the board of directors, other governing bodies, company secretaries, employees who practice, through a power of attorney, acts on behalf of the companies, and other employees with powers related to management of human resources, finance and business.
No legislation regarding financial payment mechanisms in the gaming sector has been enacted.
Moreover, the use of cryptocurrencies, and bitcoin in particular, have been strongly and expressly discouraged by the local authorities.
There have been discussions on the possibility of the digital (Chinese) yuan being used in the Macau casinos.8
Casino gaming operators have to pay an annual premium, a special gaming tax and two special contributions.
As a consideration for the operation of casino games of chance, an annual premium comprising a fixed and a variable portion is due.
The fixed portion is determined by order of the Chief Executive. The variable portion takes into consideration the following criteria: number of casinos, number of tables (and of gaming machines according to the draft law proposal), games operated and location of the casinos.
Currently, the fixed portion is determined by the Order of the Chief Executive No. 215/2001 of 30 October 2001 (and the sub-concession contracts in relation to the sub-concessionaires) and is set at 30 million patacas. The variable portion is based on the number and type of gaming tables and gaming machines operated: 300,000 patacas per VIP gaming table; 150,000 patacas per non-VIP gaming table; and 1,000 patacas per gaming machine.
Casino games of chance are subject to a special gaming tax of 35 per cent levied on the gross gaming revenue, applicable to all games, including gaming machines.
No offset of uncollectable gaming debts is allowed.
Casino operators are required to propose, during the public tender, the percentage they would be bound to pay during the term of the concession for two different contributions, one of an annual amount not exceeding 2 per cent of gross gaming revenue to a public foundation for the promotion, development and study of cultural, social and economic, educational, scientific, academic and philanthropic activities, and another in an annual amount not exceeding 3 per cent of gross gaming revenue for urban development, tourism promotion and social security of the MSAR.
As per the casino gaming concession contracts, the casino operators are bound to pay 1.6 per cent of gross gaming revenue as a contribution to a public foundation and 2.4 per cent of gross gaming revenue as a contribution for urban development, tourism promotion and social security of the MSAR, with an exception made for SJM, which is only bound to 1.4 per cent due to the dredging obligation that it is, under the concession contract, jointly liable with the dredging provider company.
The horse-racing operator is subject to pay an annual rent of 15 million patacas and a tax on the total annual amount of the bets registered in the totaliser, as follows:
Moreover, in consideration for the (last) renewal of the concession (until 31 August 2042), the concessionaire agreed to be bound to gradually increase its share capital until 31 December 2023, up to a minimum of 1.5 billion patacas.
On 31 December 2018, new obligations and deadlines for completion were imposed on the horse racing concessionaire to comply with a 1.5 billion patacas investment plan. These commitments include the renovation of the equine swimming pool, stables, central building, stands, tote board and tracks (turf and sand). There are other ancillary obligations, which include the construction of hotels and tennis courts, shopping mall, offices and parking, theme park and riding school, as well as other surrounding public areas access. Non-compliance with the deadlines constitutes a violation of the concession and may cause the termination of the concession contract.13
The instant lotteries operator is subject to pay an annual rent of a minimum 1 million patacas, calculated in accordance with the following:
The sports lottery operator is subject to pay an annual rent, with a minimum of 6 million patacas, calculated in accordance with the following:
Gross revenue is defined as the difference between the total amount of sales and the amount that, under the concession contract, shall not be retained by the operator.
The Chinese lotteries operator is subject to pay an annual premium of 500,000 patacas, an annual rent of 23 per cent of the gross gaming revenue (defined as the difference between the ticket sales and the premiums paid), and an additional 5 per cent for the Macau Foundation and 1 per cent for the Montepio Oficial de Macau.
Gaming promoters are also subject to pay a special tax based on the gross revenue originated by the player. The tax rate on commissions or other remuneration paid to gaming promoters is 5 per cent and is discharging in nature.
No taxes are levied on gamblers' winnings.
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