Macau’s Legislative Assembly (AL) has scheduled Wednesday for the first reading of a new bill laying out regulatory provisions governing junket promoters and satellite casinos. The legislation, titled “Legal Framework for Operating Games of Chance in Casinos”, was first unveiled last week on the website of the AL.
Local media has confirmed the legislative proposal is separate from the amendment bill relating to the gambling hub’s existing gaming law, which has led to much discussion within the industry and is currently being evaluated at the AL.
The new legislation aims to set out the definitions of casino management companies, junkets, “collaborators” -people with a network of contacts that introduce high-value players to junkets- and satellite casinos. The bill states that collaborators would be forbidden from extending credit to players.
The legislation, set to be passed prior to a public tender for Macau’s six concessions, also recognizes a management company as an entity managing all or part of a casino of a gaming concessionaire. These companies have traditionally managed services at “satellite casinos”: facilities running under a license attached to one of the city’s six concessionaires, but operated by third parties on individually owned premises.
Grand Emperor, an example of a "satellite casino"
The new bill sets out licensing and approval requirements for management businesses, as well as a regulatory framework in which these companies will operate. The move comes as Macau officials seek greater control over satellite venues and junket operations, two controversial issues also tackled on the general gaming amendment bill.
According to reports, the provisions in the new bill would see junket representatives, collaborators or management companies found to have accepted “illegal” player deposits jailed for between two to five years, or fined up to MOP$1.5 million ($184,000). The legislation covers deposits in the form of cash, gaming chips, or other means.
The new law would replace the Administrative Regulation 6/2002, passed 20 years ago. The draft bill determines junket operators are to be prohibited from sharing gaming revenue with concessionaires -thus only able to receive a management fee- or from contracting for the exclusive use of a casino gaming area for VIP clubs.
This is not entirely new, given the provisions against sharing gaming revenue and VIP rooms have been in discussion for a time now and are also part of the gaming law amendment process. It also builds upon a crackdown on the sector, which has led to most concessionaires closing their dedicated VIP rooms and to the arrest of prominent junket figures.
Alvin Chau, former Suncity Group boss, was arrested earlier this year
The proposal also establishes that each junket promoter may only provide services to one concessionaire, and that this business relationship must first be approved by Macau’s regulator, the Gaming Inspection and Coordination Bureau (DICJ). It also calls for a minimum capital requirement for each promoter of MOP$10 million ($1.2 million) in cash.
Effective periods for contracts between junkets and licensees are to run from the granting date of the contract to 31 December each calendar year, with an option for promoters to apply for renewal. The DICJ may launch suitability checks on these partnerships at any chosen time should it have evidence of suspicious activity, such as suspicions over the source of funds.
The draft bill also grants the Secretariat for Economy and Finance the role of establishing a maximum limit of commissions earned by junkets, which is set to be announced by the government each 30 October on a yearly basis.
The measure is to be put to a vote on the AL, and legislators may propose amendments to the bill before the vote is taken. It is expected to be approved later this year, by mid-August, as the Legislative Assembly also works on the general gaming law amendment.