A 45-day public consultation launched today on proposed amendments to the city’s current gaming industry law, which include a projected ban on gaming sub-concessions.
However, the consultation does not include reference to the maximum number of gaming concessions to be granted in the future.
The government is also proposing adding specific criminal responsibility and administrative sanction regulations, as well as specific corporate responsibility regulations.
Macao’s current three gaming concessions and three sub-concessions will expire in June next year.
The city’s current six gaming operators are SJM, Wynn, Galaxy, Venetian, MGM and Melco. While SJM, Wynn and Galaxy are concessionaires, the Venetian, MGM and Melco are sub-concessionaires.
The government has still not announced whether it will extend the current gaming concessions and sub-concessions before a bidding process for the granting of future gaming concessions is ready.
The gaming law amendment bill also proposes that the government will designate representatives to be part of the management teams of future gaming operators, with the aim of strengthening its supervision of their operations.
The government is also proposing two new criminal offences, to cover illegally receiving deposits and preventing government inspectors from entering gaming premises.
The current gaming law, which came into force in 2001, stipulates that a maximum of three gaming concessions were to be granted. The following year, the government granted concessions to SJM, Wynn and Galaxy. In late 2002, the government allowed Galaxy to set up a sub-concession relationship with the Venetian – by amending Galaxy’s concession contract.
Following the issue of the first sub-concession, SJM and Wynn signed their own sub-concession deals in 2005 and 2006 respectively, with MGM and Melco respectively.
The Macao government has admitted that the city’s gaming sector has six operators despite the current gaming law stipulating a maximum of three gaming concessions is an issue “created by history”.
The government has pledged that it will solve the “historical issue” of the current gaming concession and sub-concession model – the gaming industry’s so-called “3+3” system.
Secretary for Economy and Finance Lei Wai Nong said that the public consultation covers nine major aspects, namely
1. number of gaming concessions to be granted
2. length of concessions
3. strengthened official requirements for concessionaires
4. employee protection measures
5. strengthened verification mechanisms for concessionaires and junket operators
6. government representatives in gaming operators’ management teams
7. projects with non-gaming elements
8. social responsibility
9. new criminal offences.
“The government aims for the amendments to promote the continuously healthy development of Macao’s gaming industry and to increase the sector’s competitiveness – we expect the new development phase of Macao’s gaming industry to contribute more to the city’s sustainable socio-economic development,” Lei said.
For the public consultation, the government has not proposed how many gaming concessions should be granted in future. The consultation document merely says that the government proposes to review the number of gaming concessions.
But the document also states that “too many gaming concessionaires would possibly cause vicious competition, even resulting in more irregularities in the sector”.
“This would make it more difficult for the government to supervise the sector, adversely affecting Macao’s good name as a world tourism and leisure centre,” the document warns.
Nevertheless, the government proposes that the new gaming law will clearly ban the setting-up of gaming sub-concessions.
Lei said that while the government does not have any specific suggestion on the maximum number of gaming concessions to be granted, it considers that the city’s gaming sector would need to maintain a certain size so as to ensure the government’s revenues from direct gaming tax.
In addition, the government proposes to review the maximum length of gaming concessions, but neither does it provide any suggestions.
The consultation document notes that according to the current gaming industry law, a gaming concession usually cannot exceed 20 years. However, the law allows the government to extend gaming concessions for a maximum of five years under special circumstances.
The ongoing public consultation does not address the issue of whether Macao’s current gaming tax rate of 35 per cent should be adjusted.
Macao’s gaming operators pay 35 per cent of their gross gaming revenues as direct tax to the government. They also pay an additional four to five per cent of their gross receipts as so-called contributions into the public coffers for a string of social, cultural and other causes.
Lei said that Macao’s gaming tax is highly related to the government’s revenues, the city’s economic development and residents’ welfare and benefits, so the government would need to adopt a cautious approach to the possible change in Macao’s gaming tax.
According to the Finance Services Bureau, the government’s income from direct gaming taxes amounted to MOP 25.4 billion in the first eight months of the year, accounting for 73 per cent of the government’s current receipts during that period.
The government’s amendment bill will have to be submitted to the Legislative Assembly (AL) for debate and vote, reported The Macau Post Daily.