Gaming Law 2019

Last Updated November 25, 2019

Macau

Law and Practice

Authors



MdME Lawyers is a leading Macau full-service law firm, with a strong reputation in Asia for providing high-quality and innovative legal insight to its clients. With offices in Macau and Hong Kong, the team of 25+ fee-earners represent some of the largest corporations investing and operating in Macau. The firm advises gaming clients across the broad spectrum of their legal needs, including licensing, compliance, employment, real estate, intellectual property, corporate M&A, anti-money laundering, financing, and tax and litigation. The need to deliver local knowledge with a global reach has led the firm to launch the Lex Mundi Gaming Solution – a network of law firms that combines the expertise of gaming lawyers across 27 jurisdictions around the world. MdME is also part of the gaming law practice of Morais Leitão Legal Circle, a multidisciplinary team of experts with leading offices in Portugal, Macau, Angola and Mozambique.

All current gaming concessions (and sub-concessions) are set to expire in 2022. This is currently a hot topic and possible developments are likely to be up for discussion by the Macau government in 2020. The government may decide on the possibility of an exceptional extension of current concession contracts, and/or on the launch of a new public tender as well as on conditions for that tender, in particular the number of concessions to be granted.

Macau’s gaming regulator, the Gaming Inspection and Coordination Bureau (hereinafter DICJ) has announced a revision of the gaming promoters' (also known as junkets) licensing rules (currently governed by Regulation 6/2002) to ensure more stringent background checks and enact measures to improve the suitability and financial soundness of the gaming promoters. It is expected that these changes will be enacted in the near future.

Revision of the Electronic Gaming Machines (EGM) Regulation (Regulation 26/2012), which regulates electronic gaming machines and systems as well as other gaming equipment, is also underway, in particular focusing on the licensing procedures for EGM manufacturers, suppliers, distributors and laboratories.

On 13 March, the Macau Chief Executive (hereinafter CE) has extended the term of Sociedade de Jogos de Macau SA's concession contract until 26 June 2022. The underlying reason was to regularise the terms for all gaming concessions in order to contribute to the consolidation of the work related to the preparation for the new public tender and also to contribute to the maintenance of social stability (such as the stability of the labour market).

Recently, DICJ has issued new instructions in respect of the following:

Anti-money Laundering

DICJ has amended Instruction 1/2019 regarding procedures to be adopted in the gaming industry for the preventions of money laundering and terrorism financing crimes. The main amendments contain clarifications to the legal definition of: (i) foreign politically exposed persons, (ii) the duty of reporting suspicious transactions and (iii) inter-property transactions.

Gaming Promoters Activity

In particular regarding prohibitions on performing settlement transactions unelated to Macau or the use of Macau as a settlement platform for foreign transactions and other limitations. 

Data Protection

Restrictions on the transfer of players' personal data to third parties, or any entity in or outside Macau, were imposed on gaming concessionaires and gaming promoters. According to the information publicly available, these restrictions apply to any information related to gaming activities or operations, including, but not limited to, the players personal data, such as place of origin or nationality, profession, amount of bets, or other information such as the time of entrance into a casino According to the instruction there is no ban on the transfer of information, instead an imposition for the gaming concessionaires and promoters to obtain authorisation from DICJ.

Under the recent amendments to Law 10/2012 (amended by Law 17/2018) (hereinafter Gaming Participation Law), from 27 December 2019 onwards, casino concessionaire's employees are banned from entering casinos when off duty. This includes staff that are not directly involved with gaming operations, such as the cashier, cage staff, food and beverage outlet workers, cleaners and those connected to surveillance operations.

The commercial operation of online gaming (referred to as “interactive gaming” under Law 16/2001 (Macau Gaming Law)) can only be pursued by privately owned entities that have been granted a concession to that effect, through entering into a concession contract with the Macau Government.

However, the Macau Government has not issued regulations governing the concession and operation of online gaming (and has not launched a tender to grant these concessions). Additionally, concessionaires of casino games of chance cannot operate interactive games.

The limitations listed above are applicable to all forms of gaming activities identified in 3.2 Definition of Gambling.

The exclusive operators of horse racing (Macau Horse Racing Company Limited, hereinafter MJC) and sports betting (Sociedade de Lotarias e Apostas Mútuas de Macau, hereinafter SLOT) can offer online wagering limited to the land-based competitions they already offer.

  • Bingo is prohibited.
  • Casinos are prohibited – unlike for land-based games of chance, the Macau Government has not issued regulations governing the concession and operation of online casino games of chance.
  • Lotteries are prohibited.
  • Social gaming is restricted – there is no statutory definition of social gaming in Macau and social gaming per se is not a regulated activity. However, social gaming offered through the web or through online mobile platforms may qualify as interactive gaming. Therefore, the definition of interactive gaming effectively places limitations on how social casino games can be legally operated in Macau through those platforms.
  • Poker is prohibited – poker is one of the approved games of chance that can be offered in Macau casinos. Unlike for land-based games of chance, the Macau Government has not issued regulations governing the concession and operation of online casino games of chance.
  • Fantasy sports – there is no statutory definition of fantasy sports in Macau and fantasy sports per se are not a regulated activity.

The commercial operation of gaming in Macau is statutorily reserved to the Macau Government and can only be pursued by privately owned entities that have been granted a concession to that effect, by entering into a concession contract with the Macau Government.

Betting

Macau allows betting on horse races. This activity can only be operated by entities that have been previously granted a concession to that effect. Their licensing and operations are governed by several executive orders issued by the Macau CE and by the relevant concession contract. This activity has been historically pursued on an exclusive basis by a single operator, MJC. 

Macau also allows placing of bets in sports competitions, namely soccer and basketball. Sports betting is also pursued on an exclusive basis by one single operator, SLOT.

Poker

Poker qualifies as a game of chance (see below, casino games). The following are the authorised games of poker:

  • 3-card poker;
  • 5-card poker;
  • football poker;
  • Q poker;
  • stud poker;
  • Texas hold'em poker;
  • fortune 3-card poker; and
  • Omaha poker.

Casino

Games of chance and gaming-machine games can only be explored in casinos (except for the situations listed under 5.1 Premises Licensing). Games of chance are defined as those in which the outcome is contingent, as it depends exclusively or predominantly on the player's luck. A casino concessionaire can only offer games of chance that are listed in the Macau Gaming Law or that have been approved by the Macau Government. The following is the complete list of pre-approved table games that can be offered in Macau casinos:

  • 3-card baccarat;
  • baccarat;
  • black jack;
  • boule;
  • craps;
  • cussec;
  • casino war;
  • dozen numbers;
  • fantan;
  • sap i chi or 12-card game;
  • 13-card game;
  • mahjong;
  • mahjong baccarat;
  • mahjong paikao;
  • mini paikao;
  • pachinko;
  • paikao;
  • fish-prawn-crab;
  • 3-card poker;
  • 5-card poker;
  • football poker;
  • Q poker;
  • lucky wheel;
  • roulette;
  • stud poker;
  • super pan 9;
  • taiwan paikao;
  • makccarat;
  • Texas hold'em poker;
  • fortune 3-card poker;
  • fortune 8;
  • dragon/phoenix; and
  • Omaha poker.

The Macau Secretary of Economy and Finance must approve the rules of each game of chance following a recommendation by the DICJ, at the request of at least one casino concessionaire.

Gaming Machines

A gaming machine is statutorily defined as a device (including the gaming programs and associated software, the memory compartment, the random generator and any means of gaming software storage) that is both:

  • fully or partially operated by electric, electronic or mechanical means; and
  • conceived, adapted or programmed to operate a game of chance and to pay prizes (in cash, gaming chips, redeemable tickets or other values) resulting from the placement of wagers in the games that it offers.

All gaming machines and electronic table games must be authorised by the DICJ. They must also comply with the Macau published standards (including EGM and Electronic Table Games Technical Standards) and compliance must be certified by a recognised gaming testing laboratory. Only manufacturers or distributors previously licensed by DICJ can supply or distribute gaming machines in Macau.

Lotteries

The operation of lotteries in Macau is allowed both in the form of an instant lottery and in the form of a Chinese lottery (popularly known as pacapio). Instant lotteries are operated on an exclusive basis by SLOT under the same concession contract that grants SLOT the exclusive right to operate sports betting. The Chinese lottery is also operated on an exclusive basis by one single operator, Sociedade de Lotarias Wing Hing, Limitada.

Bingo

Bingo is not currently approved as a game of chance and cannot be offered in Macau casinos or other gaming venues.

The main legislation regulating land-based gaming in Macau is the Macau Gaming Law. The Macau Gaming Law sets out the legal framework for the commercial operation of different gaming products, with a particular focus on the commercial operation of casino games of chance.

Other relevant legislation applicable to land-based gaming includes:

  • the Instant Lottery Law (Law 12/87/M), which governs the concession and operation of instant lotteries;
  • the Illegal Gaming Law (Law 8/96/M), which covers the unlicensed supply of games;
  • the International Gaming Tender Regulation (Regulation 26/2001) (subsequently amended by Regulations 34/2001 and 4/2002), which sets out the rules applicable to the international public tender procedure that the Macau Government followed to award the existing concessions for the operation of casino games of chance;
  • the Gaming Promoters' Regulation (Regulation 6/2002) (subsequently amended by Regulation 27/2009), which governs the licensing and activities of gaming promoters;
  • the DICJ Byelaws (Regulation 34/2003);
  • the Gaming Credit Law (Law 5/2004), which regulates the granting of gaming credit by casino operators and gaming promoters;
  • the Gaming Promoters Commissions Regulation (Regulation 27/2009), which imposes certain limitations on the commissions paid to gaming promoters;
  • the Gaming Participation Law, which regulates the conditions of entry, working and gaming at casinos; and
  • the EGMs Regulation (Regulation 26/2012), which regulates electronic gaming machines and systems and other gaming equipment and sets out the licensing procedures for EGM manufacturers and suppliers.

Additionally, the DICJ issues instructions that are binding on the entities that it supervises, including:

  • casino concessionaires;
  • gaming promoters;
  • sports betting concessionaires;
  • horse racing concessionaires;
  • lottery concessionaires;
  • gaming promoters;
  • casino service providers; and
  • EGM manufacturers and suppliers.

Relevant instructions of the DICJ include those addressing:

  • technical standards for EGMs and electronic table games (Instruction 2/2014);
  • anti-money laundering and counter-terrorism financing (Instruction 1/2016) (amended by Instruction 1/2019);
  • Macau jackpot technical standards (Instruction 2/2016); and
  • dealer-operated electronic table game technical standards version 1.0 (Instruction 1/2017).

There is no general statutory definition of gaming in Macau. However, the Macau Gaming Law defines games of chance as those in which the outcome is contingent, as it depends exclusively or predominantly on a player's luck.

The Macau Gaming Law also defines pari-mutuel betting as a form of betting on animal races or sports competitions in which the winners divide the pool among themselves (minus commissions, fees and taxes) in proportion to the amount individually bet.

The Macau Gaming Law generally refers to other gaming products as "operations offered to the public", which are defined as those in which the expectation of winning lies exclusively on chance (for example, lotteries, raffles and lucky draws).

There is no statutory definition of land-based gaming. Generally, land-based gaming refers to the commercial operation of casino games of chance (either in the form of table games or gaming machines) or to other legal forms of gaming, where players physically place their bets or wagers in locations previously authorised for this purpose by the Government of Macau.

Online gaming is referred to as “interactive gaming” and defined as the playing of games of chance that meet the following criteria:

  • they are offered in Macau casinos in the form of table games or gaming machines;
  • they offer a prize in cash or in kind that can be won in accordance to their respective rules;
  • players participate by means of telecommunications (including telephone, fax, internet, data networks and video or digital data transmission); and
  • players make or agree to make payments in cash or in kind to play the game.

The Illegal Gaming Law (Law 8/96/M) covers the unlicensed supply of games of chance. It prohibits all forms of operation, promotion or assistance of gaming outside the areas that have been approved as casino or gaming areas, as well as fraudulent gaming in approved areas and the giving of unlicensed gaming credit to players.

Depending on the specific crime, penalties vary, from fines to imprisonment for up to eight years. Accessory penalties include prohibition from entering casinos, apprehension, and reversion to Macau of all gaming materials and monies or other values used for illegal gaming. The Illegal Gaming Law recognises several other unlawful administrative acts, the penalties of which can go from MOP300 (approximately USD37) up to MOP10,000 (approximately USD1,238).

Law 9/96/M covers criminal offences related to animal races. Depending on the specific crime, penalties from fines to imprisonment for up to three years may be imposed.

Please see 1.2 Recent Changes.

The Macau CE is the authority that is ultimately responsible for:

  • determining the gaming policy; and
  • licensing and regulating the operation of casino games of chance and other gaming activities in Macau.

In exercising these powers, the Macau CE is assisted by the DICJ. In its role as a policy advisory body, the DICJ is responsible for assisting the Macau CE in defining, co-ordinating and executing economic policies for the gaming industry.

Macau adopts a prescriptive approach to regulation. However, the guidelines issued by DICJ suggest a more risk-based approach.

The commercial operation of gaming in Macau is statutorily reserved to the Macau Government and can only be pursued by privately owned entities that have been granted a concession to that effect, by entering into a concession contract with the Macau Government.

The Macau Government has entered concession contracts with operators to provide the following gaming services:

  • Casino gaming - there are currently three concessionaires (Sociedade de Jogos de Macau, SA, Wynn Resorts (Macau), SA and Galaxy Casino, SA) and three sub-concessionaires (Venetian Macau, SA, MGM Grand Paradise, SA and Melco Crow, SA) allowed to offer games of chance in casinos. Please note that a casino concessionaire can only offer the games of chance that are listed as such in the Macau Gaming Law or that have been approved by the Macau Government. These approved games can be offered both in the form of table games and of gaming machines.
  • Sports betting - betting on soccer and basketball is offered, on an exclusive basis, by one single operator, SLOT.
  • Horse race betting – betting on horse races is offered on an exclusive basis by MJC.
  • Lottery - the operation of lotteries in Macau is allowed both in the form of an instant lottery and in the form of a Chinese lottery (popularly known as pacapio). Instant lotteries are operated on an exclusive basis by SLOT. The Chinese lottery is also operated on an exclusive basis by Sociedade de Lotarias Wing Hing, Limitada (hereinafter Wing Hing).

Licences are not readily available in Macau. In order to operate any of the legally allowed gaming services in Macau, an entity must be awarded a concession contract.

A concession for the operation of games of chance in a casino may only be awarded following a public tender launched by the Macau CE. As of this date, the commercial operation of casino games of chance (either in the form of table games or gaming machines) can only be pursued by one of the three operators that were granted a gaming concession following an international public tender launched in 2001 and governed by the International Gaming Tender Regulation (Regulation 26/2001). Subsequently, the Macau Government authorised these concessionaires to enter into one sub-concession agreement each, therefore raising the total number of casino operators to six. All current concession and sub-concession contracts are due to expire on 26 June 2022. Until then, the casino market is closed to new concessionaires.

Each of the pari-mutuel betting, sports betting and lottery operations was granted, in exclusivity, by means of concession contract to, respectively MJC, SLOT and Wing Hing.

A casino concession or sub-concession contract has a maximum initial duration of 20 years. If it was granted for a lesser period, it can be extended, one or more times, up to a maximum of 20 years. The maximum duration of a concession or sub-concession can be extended beyond the twenty-year term, one or more times, for a maximum of five years. This extension can only be granted on an exceptional basis under a justified decision of the Macau CE.

The concession contract of SLOT was renewed in 2016 for a period of five years, ending on 5 June 2021. The MJC concession contract was renewed in 2018 and will end on 31 August 2042. The concession contract for the operation of the Chinese lottery has been renewed on an annual basis since 2010, with the current term ending on 31 December 2019.

Only joint stock companies (sociedades anónimas) incorporated under the laws of Macau, which have the operation of games of chance as their exclusive scope of business, can bid for a casino concession. At least 10% of the registered share capital of a casino concessionaire and of a casino sub-concessionaire must be held by its managing director (administrador-delegado), who must be a permanent resident of Macau.

The granting of gaming concessions is made through a public tender launched by the government. The rules of the first (and only) public tender launched since the approval of the Macau Gaming Law were set out in Regulation 26/2001 and in the CE Decision 217/2001, which officially opened the tender. In this tender, the bidders, their qualified shareholders (that is, shareholders holding, directly or indirectly, 5% or more of the company’s share capital), and their directors and key employees, were subject to a suitability investigation conducted by the DICJ, which verified their experience, reputation and probity. The bidders and their qualified shareholders also had to demonstrate an adequate financial capacity and were subject to investigations into their financial background.

A special committee, appointed by the Macau CE, conducted the public tender. The tender programme defined the minimum requirements of qualification, the information the bidders were expected to disclose and the mandatory elements of the proposals to be submitted.

The 2001 tender (for which a total of eighteen bidders qualified) led to the award of the three casino concessions that are currently in force. The awarding criteria were the following:

  • total concession premium amount offered;
  • amount offered as contribution to a public foundation for the promotion of the cultural, scientific, social, economic and educational development of Macau;
  • amount offered as contribution to the urban development, tourism promotion and social security of Macau;
  • operational experience;
  • investment project;
  • development of casino premises and contribution to tourism diversification; and
  • contribution to the creation of jobs in the gaming industry and to the training of its professionals.

There is no legally specified length for the public tender procedure. The only public tender procedure to date took three to four months from the Macau Government's launch of the public tender until the announcement of the gaming concessions on 8 February 2002.

Pursuant to the first public tender launched in Macau, the bidders were required to provide a security deposit for admission to tender in the minimum amount of MOP1 million (approximately USD125,000). The amount covers all costs incurred for the suitability and financial investigations required during the bidding process, which costs will be deducted from the deposit.

Games of Chance

Casino concessionaires shall pay an annual concession premium comprising:

  • a fixed amount of MOP30 million (approximately USD3.8 million); and
  • a variable amount levied on the number of table games and gaming machines at the following approximate rates:
    1. for each VIP table game – MOP300,000 (approximately USD37,500);
    2. for each mass-market table game – MOP150,000 (approximately USD18,800); and
    3. for each gaming machine – MOP1,000 (approximately USD125).

Instant Lotteries

The annual rent for instant lotteries is calculated based on a percentage of the total annual revenue of instant lotteries, with a minimum amount of MOP1 million (approximately USD125,000) per year calculated in accordance with the guidelines below:

  • if the annual gross revenues amount is up to MOP10 million (approximately USD1.2 million) it shall pay the minimum amount of MOP1 million (approximately USD125,000);
  • if the annual gross revenues amount is between MOP10 million (approximately USD1.2 million) and MOP30 million (approximately USD3.7 million): it shall pay 12% of the excess;
  • if the annual gross revenues amount is between MOP30 million (approximately USD3.7 million) and MOP45 million (approximately USD5.6 million): it shall pay 13% of the excess;
  • if the annual gross revenues amount is between MOP45 million (approximately USD5.6 million) and MOP60 million (approximately USD7.4 million): it shall pay 14% of the excess;
  • if the annual gross revenues amount is between MOP60 million (approximately USD5.6 million) and MOP80 million (approximately USD9.9 million): it shall pay 16% of the excess;
  • if the annual gross revenues amount is between MOP80 million (approximately USD5.6 million) and MOP100 million (approximately USD12.4 million): it shall pay 18% of the excess; and
  • if the annual gross revenues amount is more than MOP100 million (approximately equivalent of USD12.4 million): it shall pay 20% of the excess.

Sports Betting

SLOT shall pay an annual fee in a minimum amount of MOP6 million (approximately USD743,000) calculated in accordance with the guidelines below:

  • if the annual gross revenue amount is up to MOP30 million (approximately USD3.7 million): it shall pay the minimum amount of MOP6 million (approximately USD743,000);
  • if the annual gross revenue amount is between MOP30 million (approximately USD3.7 million) and MOP40 million (approximately USD4.9 million): it shall pay 22% of the excess;
  • if the annual gross revenue amount is between MOP40 million (approximately USD4.9 million) and MOP50 million (approximately USD6.2 million): it shall pay 24% of the excess;
  • if the annual gross revenue amount is between MOP50 million (approximately USD6.2 million) and MOP60 million (approximately USD7.4 million): it shall pay 26% of the excess;
  • if the annual gross revenue amount is between MOP60 million (approximately USD7.4 million) and MOP70 million (approximately USD8.7 million): it shall pay 28% of the excess;
  • if the annual gross revenue amount is between MOP70 million (approximately USD8.7 million) and MOP100 million (approximately USD12.4 million): it shall pay 30% of the excess; and
  • if the annual gross revenue amount exceeds MOP100 million (approximately USD12.4 million): it shall pay 25% of the excess.

Chinese Lottery (Pacapio)

Sociedade de Lotarias Wing Hing, Limitada shall pay an annual concession premium of MOP500,000 (approximately USD61,900), an annual rent which is calculated as 23% of the total gross gaming revenue, and additional contributions comprised of 5% for the Macau Foundation and 1% for the Macau Montepio Oficial.

Horse Racing

MJC shall pay an annual fixed amount of MOP15 million (approximately USD1.9 million) and a variable amount of tax levied on the total annual amount of the bets registered in the “totaliser” calculated in accordance with the guidelines below:

  • between MOP2.5 million (approximately USD310,000) and MOP3 million (approximately USD371,000): a tax of 0.5% shall be applicable;
  • between MOP3 million (approximately USD371,000) and MOP3.5 million (approximately USD433,000): a tax of 1% shall be applicable;
  • between MOP3,5million (approximately USD433,000) and MOP4 million (approximately USD495,000): a tax of 1.5% shall be applicable;
  • between MOP4 million (approximately USD495,000) and MOP4.5 million (approximately USD557,000): a tax of 2% shall be applicable; and
  • above MOP4.5 million (approximately US$557,000): a tax of 2.5% shall be applicable.

The operation of casino games of chance may only take place within premises authorised as casinos by the Macau Government. This rule has some exceptions, notably the slot machine parlours known as “Mocha Clubs”.

The Gaming Law defines a "casino" as a place authorised by the Macau Government for gambling purposes. These specific places may be located within a resort, hotel or other multi-purpose location. However, there are some specific conditions under which gaming may be permitted outside casinos, for example in vessels, aircraft and at the Macau International Airport.

The Gaming Law does not provide any criteria or guidelines as to what is required to classify and authorise any given space as a Casino. This means that the Macau Government has substantial discretionary powers to proceed with such classification according to its own convenience and what it perceives as the public interest.

For recent changes, please see 1.2 Recent Changes.

Issues around B2C licences do not arise in Macau as no concessions for online gaming have been granted, see 2.1 Online.

Issues around B2B licences do not arise in Macau as no concessions for online gaming have been granted, see 2.1 Online.

Issues around the regulation of affiliates do not arise in Macau as no concessions for online gaming have been granted, see 2.1 Online.

Issues around the licensing and regulatory requirements applying to white-label providers do not arise in Macau as no concessions for online gaming have been granted, see 2.1 Online.

There are no expected changes to the online gaming regime in Macau.

Issues around technical measures to protect consumers from unlicensed operators do not arise in Macau as no concessions for online gaming have been granted, see 2.1 Online.

Several laws and measures related to responsible gaming (RG) were introduced in 2012 with the enactment of the Gaming Participation Law. This Law established the legal framework of the conditions for entering, working in and gaming at casinos, by:

  • raising the minimum age to enter casinos to 21;
  • providing for a self-exclusion and a third-party exclusion programme; and
  • addressing the treatment of the winnings of people not allowed in casinos.

Casino concessionaires must set up adequate control procedures to ensure compliance with the statutory restrictions on participation.

Pursuant to the latest amendments to the Gaming Participation Law (amended by Law 17/2018), from 27 December 2019 onwards, when off-duty, the employees of a casino concessionaire are banned from entering into casinos, including staff not directly involved with gaming operations, such as cashiers, cage staff, food and beverage outlet workers, cleaners and those connected to surveillance operations.

The DICJ has implemented self-exclusion and third-party exclusion procedures. Casino concessionaires must set up adequate control procedures to ensure compliance with the statutory restrictions on participation in gaming activities.

The current anti-money laundering regime was introduced by Law 2/2006 (amended by Law 3/2017) and further complemented by Regulation 7/2006 (amended by Regulation 17/2017). This legislation is further complemented by DICJ Instruction 1/2016 (subsequently amended by DICJ Instruction 1/2019).

The casino concessionaires, gaming promoters and other gaming concessionaires must comply with a comprehensive set of obligations aimed at curbing money laundering activities in the gaming industry. These obligations include:

  • customer due diligence obligations;
  • enhanced monitoring of play by politically exposed persons;
  • identification and reporting of suspicious transactions;
  • the obligation to refuse to carry out transactions when mandatory information is not provided; and
  • record-keeping obligations.

The Macau Financial Intelligence Office is the entity responsible for receiving and processing reports on cash transactions and suspicious transactions. The DICJ is responsible for supervising and enforcing the gaming industry's compliance with its anti-money laundering obligations.

The supervisory department for advertising is the Macau Economic Services Bureau (hereinafter MES). However, DICJ has the powers to supervise and monitor the activity of gaming entities particularly regarding compliance with their legal, regulatory and contractual obligations.

The legal definition of advertising refers to any disclosure aimed at the public, in respect of a particular good or service with a commercial nature, for the purpose of promoting its acquisition.

The key legislation regulating advertisement in Macau was introduced by the Macau Advertisement Law (Law 7/86/M). It was further complemented by the instructions issued by MES with the aim of providing clarification applicable to the gaming industry.

Under the concession and sub-concession contracts, the gaming concessionaires and sub-concessionaires undertake to carry out, in and outside Macau, advertising and marketing campaigns for their integrated resorts (including their casinos) but cannot, without the authorisation of the Macau Government, use images of or references to its casinos to promote interactive (online) gaming.

The Advertising Law prohibits any type of marketing activity that depicts games of chance or their play as the essential element of the advertisement.

The prohibition of gaming advertising is complemented by a set of instructions issued by the MES. These instructions were issued with the aim of facilitating the interpretation of the prohibition. The instructions detail the types of advertising activities that are considered illegal by the MES and give practical examples of illegal activities. The prohibition applies to all types of marketing conducted in Macau and encompasses games of chance played offline and online. However, the prohibition does not appear to cover the types of gaming that do not qualify as games of chance, such as sports betting and lotteries.

Illegal advertising is punished by penalties ranging between:

  • MOP2,000 (approximately USD248) and MOP12,000 (approximately USD1,485) for individuals; and
  • MOP5,000 (approximately USD619) and MOP28,000 (approximately USD3,466) for corporations. 

According to Macau Gaming Law, the transfer or encumbering, for any reason, of the property or other right in rem of the gaming concessionaire's shares; or the carrying out of any act that may involve the granting of the right to vote, or other social rights, to a person other than the holder, requires the authorisation of the government, otherwise it shall be considered null and void. These transfers and grants are also subject to an obligation to be communicated to DICJ within 30 days.

Any transfer, in any manner, directly or indirectly, of at least 5% of the share capital of the gaming concessionaire shareholders (and so on, successively, until the ultimate shareholders) must obtain the Macau Government's prior approval, except in the case of corporations whose shares are listed on the stock exchange.

Limitations to cross-shareholding between gaming concessionaires are also enforced. Gaming concessionaires, as well as the shareholders that hold 5% or more of their respective capital, cannot own, directly or indirectly, an equal or higher percentage in the share capital of another gaming concessionaire.

Please see 10.1 Disclosure Requirements.

Please see 10.1 Disclosure Requirements.

The main powers of the regulatory authority (DICJ) are to:

  • co-operate in defining, co-ordinating and executing economic policies relating to the commercial operation of casino games of chance, wagering and other gaming products offered to the public;
  • supervise and monitor the activity of gaming concessionaires, particularly regarding compliance with their legal, regulatory and contractual obligations;
  • supervise and monitor the suitability and the financial soundness of gaming concessionaires and of other entities or individuals as determined by law;
  • assist the government in classifying premises as casino venues;
  • authorise and certify all gaming equipment allocated by gaming concessionaires for the operation of their respective concessions;
  • license gaming promoters and supervise and monitor their activity, particularly regarding compliance with their legal, regulatory and contractual obligations;
  • supervise and monitor the suitability of gaming promoters and their collaborators and key employees;
  • determine breaches of the applicable laws and apply the relevant penalties;
  • ensure that the relationships between the government and the gaming concessionaires, and between the concessionaires and the general public, develop in an appropriate manner and in accordance with the best interests of Macau; and
  • perform, as determined by the CE or under the applicable laws, any other duties not included in the preceding paragraphs that by their nature fall within the general scope of its responsibilities.

The sanctions are enforced by DICJ as the entity responsible for the enforcement of the legal framework applicable to the gaming related activities.

Financial penalties are applied by DICJ.

There are no recent updates relevant to social gaming.

eSports have been gaining a growing presence in Macau. Some gaming concessionaires and sub-concessionaires have recently partnered with third parties for the organisation of eSports events. 

There are no recent updates relevant to fantasy sports.

There are no recent updates relevant to skill gaming.

Blockchain technology is not specifically regulated in Macau. Consequently, there are no relevant recent trends.

There are no recent trends relevant to the reform of gaming in Macau.

The special gaming tax is the largest source of gaming tax revenues. This tax applies to casino concessionaires and sub-concessionaires and is levied on their gross gaming revenue at a rate of 35%.

Casino concessionaires and sub-concessionaires must also pay:

  • a contribution to the Macau Foundation, a public foundation responsible for promoting the cultural, scientific, social, economic and educational development of Macau (1.6% of gross gaming revenue); and
  • a special contribution for urban development, tourism promotion and social security (2.4% of gross gaming revenue for all casino concessionaires except for Sociedade de Jogos de Macau, SA that, for historical reasons, is subject to a 1.4% rate).

Although casino concessionaires and sub-concessionaires are legally subject to profit tax (locally named complementary tax), they have been historically been exempt from paying it under an order of the CE issued under the provisions of the Macau Gaming Law.

As for the other forms of land-based gaming activity, identified in 3.2Definition of Gambling, the type (rate) of taxes and other levies applicable depends on respective concession contracts (which are detailed in 4.9 Ongoing Annual Fees).

MdME Lawyers

Avenida da Praia Grande, No 409
21/F, 23/F - A/B, China Law Building
Macau

+853 2833 3332

+853 2833 3331

mdme@mdme.com.mo www.mdme.com.mo/en/
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Law and Practice

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MdME Lawyers is a leading Macau full-service law firm, with a strong reputation in Asia for providing high-quality and innovative legal insight to its clients. With offices in Macau and Hong Kong, the team of 25+ fee-earners represent some of the largest corporations investing and operating in Macau. The firm advises gaming clients across the broad spectrum of their legal needs, including licensing, compliance, employment, real estate, intellectual property, corporate M&A, anti-money laundering, financing, and tax and litigation. The need to deliver local knowledge with a global reach has led the firm to launch the Lex Mundi Gaming Solution – a network of law firms that combines the expertise of gaming lawyers across 27 jurisdictions around the world. MdME is also part of the gaming law practice of Morais Leitão Legal Circle, a multidisciplinary team of experts with leading offices in Portugal, Macau, Angola and Mozambique.

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