Gambling in Macau

Gambling in Macau


Gambling in Macau has been legal since
the 1850s when the Portuguese government legalised the activity in the colony.
Since then, Macau has become known worldwide as the “Monte Carlo of the
Orient”. Gambling tourism is Macau’s biggest
source of revenue, making up about 50% of the economy. Visitors are made up
largely of Chinese nationals from the mainland China and Hong Kong. With the
entry of large foreign casinos from Las Vegas and Australia, Macau overtook the
Las Vegas Strip in gaming revenues in 2007.
Until Western-style casino games were introduced in the 20th century, only
Chinese games were played, the most popular being Fan-Tan. Generally,
gambling in Macau can be divided into one of four categories: casino games,
greyhound racing, sports betting, and lotteries. At the present time, Macau
does not license online gaming operations.
History In an attempt to generate revenues for
the government, gambling in Macau was legalised around 1850. In the late 19th
century, the government introduced a licensing system for the fantan houses.
It is reported that over 200 gambling houses were required to pay gambling
rent to the government. The second casino monopoly concession was granted
to the Tai Heng Company in 1937. The company was, however, too conservative
to fully exploit the economic potential of gambling. The industry saw a major
breakthrough in 1962 when the government granted the Sociedade de Turismo e
Diversões de Macau, a syndicate jointly formed by Hong Kong and Macau
businessmen, the monopoly rights to all forms of gambling. The STDM introduced
western-style games and modernised the marine transport between Macau and Hong
Kong, bringing millions of gamblers from Hong Kong every year. The license was
extended in 1986 for another 15 years but expired at the end of 2001.
Macau was transferred to the People’s Republic of China in 1999 and became a
special administrative region of China. During this transition, there were no
changes to gambling policy in Macau. In 2002, the Macau government ended the
monopoly system and 3 casino operating concessions were granted to Sociedade de
Jogos de Macau, Wynn Resorts, Las Vegas Sands, Galaxy Entertainment Group, the
partnership of MGM Mirage and Pansy Ho Chiu-king, and the partnership of Melco
and PBL. Today, there are 16 casinos operated by the STDM, and they are still
crucial in the casino industry in Macau. Economic aspects
The so-called “Monte Carlo of the Orient”, Macau’s economy relies heavily
on gambling. Nowadays, the gambling industry generates over 40% of the GDP
of Macau. Since the early 1960s, around 50% of Macau’s official revenue has been
driven by gambling. The percentage remained steady until the late 1990s. In
1998, 44.5% of total government revenue was produced by the direct tax on
gambling. Then there was a 9.1% decrease in 1999, probably due to internet
gaming. After the handover of the Macau from Portugal to China, the SAR released
gambling licenses to other companies in order to eliminate the monopoly played
by the STDM. In 2002, the government signed concession contracts with two
Macau gaming companies, Wynn Resort Ltd. and Galaxy Casino. This opened the
gambling market for competition and increased government tax revenue
significantly. It also attracted more tourists to Macau. At this moment,
according to official statistics, gambling taxes form 70% of Macau’s
government income. However, the gambling industry is also a
source of instability in the Macau economy, as the nature of gambling
business is not susceptible to technological advancement or
productivity growth. The gambling business is still dependent on the
prosperity of other Asian economies, especially that of Hong Kong. Due to Xi
Jinping’s promise on cracking down of Corruption across mainland China, casino
profits from across Macau have been reporting a decline in monthly profits
Gambling forms =Casinos=
Macau has 33 casinos, of which the biggest is The Venetian Macao.
Twenty-three casinos are located on the Macau Peninsula and ten on Taipa Island.
They all operate under a government franchise and under a common set of
rules. The main casino operators in Macau are
SJM Holdings, Galaxy Entertainment and Las Vegas Sands with respective revenues
of 9.7, 4.8, and 4.2 billion in 2011. A wide range of games are available,
including roulette, blackjack, baccarat, boule, Sic bo, Fan Tan, keno and slot
machines. Poker was introduced only in August
2007, in an electronic table format at Galaxy Starworld casino. The first live
poker tournament was the Asia Pacific Poker Tour Macau event in November 2007.
Shortly thereafter, in January 2008, the government of Macau published the
official rules for Texas hold ’em poker games in Macau. In February 2008, Grand
Lisboa Casino added the first live-dealer cash game tables. In May
2008, ‘PokerStars Macau’ opened at Grand Waldo Casino. In November 2008, Texas
Holdem’ Poker opened at Wynn Macau. ‘PokerStars Macau’ moved to a new
location at the Grand Lisboa Casino in March 2009. Today, Wynn Macau,
StarWorld, and the Venetian offer live-dealer cash game poker tables.
Gambling has been legal in Macau since around 1850. There was a licensing
system for gambling houses until 1863. Beginning in 1934, casinos’ ownership
and operation was centralised; through private negotiations, some franchises
monopolised the operation right of all the casinos. The casino industry was
controlled by the STDM monopoly for 39 years, but this changed in 2001 when
casino licenses were offered to other casino operators, including American
companies such as Las Vegas Sands and Wynn Resorts. On 18 May 2004, the Sands
Macau casino opened near the Macau Ferry Terminal. Despite being very profitable
for investors, the gambling industry in Macau became unstable. In February 2015
Macau-based casinos reported a decline for eighth consecutive month.
=Horse racing=Other than casinos, there is betting at
the Macau Jockey Club and the dog-racing Canidrome.
Horse-racing mainly takes place every Tuesday and Saturday or Sunday at the
race-course on the Taipa Island of Macau. The race-course has an area of
450,000 square metres and 18,000 seats for gamblers, and is open only for
people over 18 years of age. The Macau Jockey Club was formerly the
Macau Trotting Club. In 1991, it was acquired by a consortium led by Stanley
Ho. The Macau Jockey Club is one of the largest private employers of Macau with
around 1,400 employees and around 1,100 part-timers.
Ways of betting On-course betting
There are over 210 betting terminals “on-course”. All terminals can perform
sell and pay functions. Punters may bet in Hong Kong dollars or Macau patacas.
Bets are accepted up to the start of each race. Punters may place a bet by
oral instructions or by filling a ticket.
Off-course betting There are over 80 betting terminals in
the Off-Course Betting Centres. 14 Off-course Betting Centres are located
in popular districts of Macau and Taipa. Internet betting
The Internet betting service commenced on 20 September 2003. Customers can
review the Club’s internet betting website at www.macauhorsebet.com.
Telephone services There are over 600 telephone service
terminals and a total of over 38,000 telebet accounts. The winning dividend
of account holders may at their instructions be automatically
transferred to their bank accounts. Fast Access Terminals
Launched in June 1997, the personal betting terminal, FAT offers betting,
calculation of bet units, record tracking of bets, account enquiry,
withdrawal instructions and other related information on races such as
declaration and race-odds. Close to 1,000 customers are currently using FAT.
Hong Kong Service Centres Three service centres are now set up in
Hong Kong including Shaukeiwan Service Centre, Sheung Wan Service Centre and
Mongkok Service Centre.=Greyhound racing=
Greyhound racing takes place at the Canidrome on Avenida General Castelo
Branco. These races are held on Mondays, Thursdays, Fridays and weekends starting
from 7:45 pm and there are 16 games on every racing evenings. Admission is
MOP$10 for the public stand. Players can bet inside the greyhound
racing centre, or in off-course betting centres located in the Hotel Lisboa,
Jai-Alai Palace and Kam Pek Casino.=Gambling and society=
The casino industry is viewed by some as harmful to society. A high crime rate
was one of the biggest problems that Macau’s colonial Portuguese government
had to face. Since Macau’s return to China’s rule in 1999, the public
security situation has markedly improved. With the growth of the casino
industry, a business called “bate-ficha” was developed and it is usually run by
different triad societies. The bate-ficha business is an element of
triad involvement in Macau’s gambling industry. Bate-ficha involves selling
customers “dead chips” that cannot be exchanged for cash in the casinos, but
only by bate-ficha men or women, who are officially known as “gaming promoters”
or “middlemen.” for a commission. Triad involvement in Macau casinos makes
a serious social impact on the local area. It attracts the attention of
Chinese gangsters, whose deadly battles over the fortunes to be made from
racketeering and extortion in the territory are a continuing problem. As
different triad societies compete for controlled territory in the casinos and
on the streets, disputes between societies occur from time to time. These
are often settled in violent ways. Even worse, triad societies have grown so
powerful in Macau that there was a trend that people tried to seek help from
these societies rather than from the police. Although the situation has
improved since the 1999 handover to China, the problem is still entrenched
in the local area. Gaming law
No one under the age of 21 are allowed to gamble.
Detailed law is enforced in Macau to ensure “qualified operation of gambling”
in Macau. The details are listed in Law 16/2001, and other laws regulating the
activity of gaming promoters and credit for gaming.
The Gaming Inspection and Coordination Bureau is the main government unit that
oversees the operation of different gaming activities.
Under Macau law, it stated that a permit issued by the Gaming Inspection and
Coordination Bureau is required for the operation of lotteries sales, lucky draw
or similar activities, and the initial procedure in the application on the
operation of lotteries sales, lucky draw, or similar activities is to submit
a notification to the relevant government department ten days prior to
the application. In the Macau legal system, gaming law is
not considered as a branch of law in the traditional sense. Instead, it may be
considered as a transversal gathering of a range of legal topics more or less
directly related to gaming, including constitutional law, administrative law,
tax law, company law, contract law, and criminal law. In this manner, issues of
public law as well as private law are of relevance for gaming.
=Tax law issues=The taxation of casino
sub/concessionaires is made of a fixed part and a variable part. The variable
part falls on the gross gaming revenue. The tax rate is currently of 35%, plus
two contributions of up to 2% and 3% for social and economic purposes. The
maximum tax is therefore 40%. In addition, a fixed premium is also
payable, plus a premium per VIP table, other table, and slot machine. Gaming
promoters pay taxes on commissions received.
=Contract law issues=From the perspective of contract law,
gaming and betting are contracts which may or may not generate civil or natural
obligations for the parties. The matter is regulated in the Civil Code 1999,
which states, drawing from Roman law, that gaming and betting generate natural
obligations except in sports competitions and where the law provides
otherwise. The problem is that gaming legislation currently does not provide
to this effect. Regarding credit for gaming, Macau law
states since 2004 that the granting of credit for casino games of fortune
generates civil obligations, which are fully enforceable in Macau courts.
Credit for casino games of fortune is defined as any case where chips are
passed on to a player without immediate cash payment of such chips; this is an
intentionally broad concept. Credit for gaming is regulated by Law no. 5/2004,
of 14 June.=Criminal law issues=
From the perspective of criminal law, there are specific criminal offences
related to gaming; see Law 8M, of 22 July, and Law 9M, of 22 July. Other
criminal law matters are covered by broader laws: the Penal Code and the law
on Organized crime. Game cheating is mentioned in art. 6 of Law 8M, of 22
July. In addition, general laws on the prevention and repression of money
laundering and the financing of terrorism through casinos apply.
=Problem gambling=As of November 2011, exclusion of
players from gambling establishments is voluntary. If the person realises that
their gambling activities begin to cause trouble, they can turn to the Gaming
Inspection and Coordination Bureau to ban them from entering the casino. The
government of Macau is seeking the opinions of the citizens on the
possibility of establishing a programme that will allow excluding problem
gamblers from all casinos without their consent. The Legislative Assembly is
currently analyzing the new draft law, which also deals with the problem of
exclusion from gambling houses. The law suggests that the person can be excluded
from the casino if they submit their own request or approve the request submitted
by their relatives.=Other matters=
Competition law matters, and advertising law, as well as the impact of WTO law on
gaming, may also be pointed out as part of gaming law. Regarding online gaming,
the Macau SAR does not currently grant concessions for online casinos. The
current casino concessions only cover land-based gaming, not online gaming.
=Academic research and teaching=The teaching of Macau gaming law started
in 2005 the Faculty of Business Administration of the University of
Macau, in the undergraduate program of gaming management. Since 2007 it is also
included in the master program of international business law offered by
the Faculty of Law of the University of Macau [1], in which various theses have
already been defended in topics of gaming law.
See also Cotai
Cotai Strip List of Macau casinos
References Bibliography
Jorge Godinho, Macau Business Law and Legal System, LexisNexis, Hong Kong,
2007 [2] Governo de Macau, O Jogo em Macau, 1985.
Angela Leong, ‘The “bate-ficha” business and triads in Macau casinos’, QUEENSLAND
U. OF TECH. L. & JUST., 84

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