GGRAsia – Macau Free Market Gambling Moves to Planned State, Says Academic

Macau open market gambling moves to planned state, academic says

The content of the Macau government’s amended gaming law and the city’s approach to the terms and conditions of new concession contracts that will be enforced following a new public tender, point to abandonment from a free-market approach to managing the industry, to a planned-state, suggests gaming law scholar I. Nelson Rose.

Updated Gaming Legal Framework Approved by Macau Legislative Assembly June 21st, includes a provision for “safeguarding” China’s “national security and safety” in the Macau Special Administrative Region, the US-based researcher noted. Mr. Rose previously taught at the University of Macau on the topic of international gaming law.

“Legal gambling has never been identified as a threat to national security,” in a country that hosts this type of activity, Rose suggested in the latest post on his “Gambling and the Law” blog.

He said raising the issue of “national security” arguably gave the government, including a chief executive from Macau, “unlimited power”. A General Manager is vested with the ability to terminate a Casino Concession in the event of an alleged violation of this condition.

“What constitutes national security? The definition has been expanded to include economic, technological, cyber and financial security, especially money flowing out of the Chinese mainland,” Rose suggested.

Mr. Rose asserted that Macau’s gaming law framework and associated updated administrative regulations were precisely designed to limit the size of the market.

He wrote: “Even the underlying purpose of legal gambling has been changed. Casinos are no longer seen as developing tourism and providing jobs. Now the policy is to use gambling to promote economic diversification. The latter is a public policy goal in Macau that has been championed for years by the Chinese central government.

The scholar argued, “In fact, the new law is expressly designed to restrict the size of Macau’s casino industry.”

Mr Rose suggested that “perhaps the greatest danger to Macau’s free market casinos” was what he called “government interference in their day-to-day operation”.

He said, referring to a detail of the new legal framework: “Not only will bureaucrats dictate how many baccarat tables will be on a floor, but they also think they can determine how much those tables should win.”

Casinos would have to “pay the government the difference if their slots and tables fail to earn a minimum annual amount,” as one Macau chief executive put it.

Under the updated legal framework, Macau game dealers have a minimum annual objective Gross Casino Gaming Revenue (GGR) to be achieved.

“The process to win one of Macau’s six casino concessions is about to begin,” Rose noted. “None of the current operators are leaving. Of course, if you have already spent billions of [U.S.] dollars to build a giant casino, you don’t really have a choice.

On Wednesday, the Macau government set up the committee to review bidders for new casino licenses expected to be awarded later this year.

Comments are closed.