MK sports-Macau passes new gaming law: up to 6 licenses issued, one-to-one operation by gaming intermediaries

MK sports-Macau passes new gaming law: up to 6 licenses issued, one-to-one operation by gaming intermediariesMacau passes new gaming law: up to 6 licenses issued, one-to-one operation by gaming intermediaries

On June 22, the Legislative Assembly of the Macao Special Administrative Region Government of China officially announced Law No. 7/2022, which was revised from Law No. 16/2001 on the Legal System of Casino Gambling Operations (hereinafter referred to as the Gambling Law). The law was passed by the Legislative Assembly on June 21 and will take effect the day after its announcement.

The revised Gaming Law clarifies that the Macao Special Administrative Region retains the right to operate casino gambling, and other entities operating such gambling must obtain prior approval. At the same time, the casino must be located in real estate owned by the concessionaire.

In terms of the concession system, the revised Gaming Law clarifies that the maximum number of concessions for operating casinos is six, that is, Macau will issue a maximum of six gaming licenses, and prohibits the burdening, transfer or assignment of the operating rights of casinos to a third party in whole or in part under any name, or the transfer or assignment of the concessionaire’s statutory rights and obligations related to casinos, or the transfer or assignment of part of the concession contract status to a third party. At the same time, the concession period for the operation of casinos should be stipulated in the concession contract and shall not exceed ten years, that is, the concession period of the license shall not exceed ten years, and may be extended for up to three years in exceptional circumstances.

In terms of the qualifications of the concessionaire, the revised Gaming Law clearly states that the concessionaire must maintain its financial strength during the concession period and must be subject to continuous supervision established by the Macao Special Administrative Region Government for this purpose. The capital of the concessionaire shall not be less than 5 billion patacas, and the net asset value of its company shall not be less than this amount during the concession period. The concessionaire and shareholders who own 5% or more of its capital shall not directly own any capital of other concessionaires operating casinos and lucky games in the Macao Special Administrative Region, or indirectly own 5% or more of the capital of other concessionaires.

It is worth noting that the revised Gambling Law has made new regulations on the gambling intermediary business. The original Gambling Law only required gambling intermediaries to register with each concessionaire to which they provide services. The new Gambling Law clearly states that each gambling intermediary can only engage in gambling intermediary business within one concessionaire and can only recommend casino lucky gambling activities to the concessionaire by charging commissions, and cannot share the casino’s income with the concessionaire in any way.

According to a report by Macau Daily on June 22, the Secretary for Economy and Finance of the Macau Special Administrative Region, Lei Weinong, pointed out that the intermediary business is to provide gamblers with various conveniences such as transportation, accommodation, catering, and entertainment, and to receive an amount of commission not exceeding the statutory upper limit from the concessionaire in return, and the intermediary is a partnership with the concessionaire. The new “Gaming Law” will “put the role of the intermediary in its proper place”, and the “one-to-one” approach will ensure that the relationship between the concessionaire and the intermediary is clearer, the financial relationship is clearer, and prevent the unlimited expansion of the intermediary. Lei Weinong also said that in the future, there will be a business operation law to make detailed provisions on the future obligations and responsibilities of the intermediary and the supervision methods, and this law is a principled provision.

Previously, according to a report by the Macau Daily News, Macau’s six casino licenses will expire on June 26. The six gaming companies plan to sign an extension contract on June 23, and the gaming operation concession period will be extended to December 31 this year. The six gaming companies will all pay a premium of 47 million Macau patacas.

On June 22, among the six gaming companies, except for MGM China (02282.HK), which was flat with the previous trading day, the other five gaming companies’ Hong Kong stocks all fell. As of the close of the Hong Kong stock market that day, Sands China Ltd. (01928.HK) fell 1.22%; Wynn Macau (01128.HK) fell 1.35%; SJM Holdings (00880.HK) fell 2.56%; Galaxy Entertainment (00027.HK) fell 1.46%; Melco International Development (00200.HK) fell 2.33%.-MK sports