Abstract
The article explores the evolution of Macau's gambling laws and regulations from 1961 to the present day. The independent gambling laws and regulations of Macau began in the 1960s, initially with casino gaming, and then expanded to other types of gambling such as horse racing betting, greyhound racing betting, soccer betting, and lotteries over the next three decades. During this period, the Portuguese colonial government ruled Macau. After Macau's handover to China in 1999, the gambling laws and regulations have continuously grown into a legal system that comprises more than a hundred documents and covers all types of gaming in Macau. The article aims to explore the historical origin and development of the primary rules, especially their unique features, to provide a better understanding of Macau's gaming legal system.
I. INTRODUCTION
Despite gambling being officially approved in Macau as early as 1847, 1 Macau's legislation on gambling started in the 1960s. The first law on games of chance (i.e., casino gaming) was enacted in 1961, followed by laws on horse racing betting, greyhound racing betting, sports betting, and lottery in subsequent years.
Legislation is one of Macau's major legal resources, which follows the civil law legal traditions, as Macau was a Portuguese colony for more than four hundred years until 1999. The main sources of gambling laws are the laws passed by the Legislative Assembly and the executive regulations issued by the Chief Executive. Other legal documents, such as the dispatch of the Chief Executive and the order of the Secretary for Economy and Finance, also supplement the gambling laws and regulations. Macau's legislation on gambling comprises hundreds of legal documents after years of accumulation.
This article aims to provide a comprehensive overview of the gambling laws and regulations in Macau by identifying the key legal documents and explaining their relationships and changes over time.
II. LEGISLATION ON GAMES OF CHANCE BEFORE THE HANDOVER IN 1999
Legislative Regulation No. 1496: the first gaming law and its multiple revisions
Legislative Regulation No. 1496 (Diploma Legislativo no 1496) was the main law governing casino gaming in Macau until Law No. 16/2001, Legal Regime for Operating Games of Chance in Casinos (hereinafter referred to as Gaming Law 2001), replaced it in 2001. This law, titled Regulating the Establishment of Games of Chance, established the basic legal framework for the gaming industry in Macau. Many current gaming laws and regulations originate from this law.
Historical background of Legislative Regulation No. 1496
Macau had no gaming legislation until 1961, even though gambling had been legal there for over a century. The only regulations that existed were about the concession fee, the payment methods, and the number of gambling stalls allowed, which were specified in the tender announcement and the contract between the government and the grantee. 2 A possible reason for the lack of gaming laws and regulations was that Portugal, the colonial power of Macau, did not legalize gambling in its own territory. It would have been inconsistent for Macau to have laws and regulations for something that was illegal in Portugal. 3
This changed when Jaime Silvério Marques became the governor of Macau in 1959. He convinced the Portugal Foreign Department to issue Ordinance No. 18267, which designated Macau as a tourism zone and allowed gambling as a special entertainment. Based on this ordinance, Governor Marques and his department enacted Legislative Regulation No. 1496 in July 1961, the first gaming law in Macau. 4
According to this law, the Portuguese colonial government selected a new company as the casino gaming concessionaire. 5 The company was formed by Ip Hon, Terry Ip Tak Lei, Stanley Ho Hon San, and Henry Fok, who all became famous figures in Macau's gaming industry later on, especially Stanley Ho. 6 The company was registered as Sociedade de Turismo e Diversões de Macao (STDM) in 1962. 7 Its flagship Casino Lisboa opened in 1970 and became a symbol of Macau's gaming industry. 8 STDM held the legal monopoly of Macau's gaming industry for more than 40 years from 1961 to 2001.
Main content of Legislative Regulation No. 1496
i. The law defines gaming as a game of fortune, rather than gambling, to reduce the negative impact of gambling and to comply with Ordinance No. 18267, which considers gaming as special entertainment. The law defines a game of fortune as “the outcome of it is contingent and the winning depends on luck alone”. This definition is vague, but it has been maintained in the subsequent laws and regulations. It remains unchanged even in the latest gaming laws such as the Gaming Law 2001 and Law No. 7/2022 (hereinafter referred to as the Gaming Law 2022), which is the most recent amendment of the Gaming Law 2001. 9
ii. The concession of casino gaming is granted on an exclusive basis through a public tender. Legislative Regulation No. 1496 integrated the concession system to Macau's gambling industry, which has continued until today, although with multiple concessions instead of a monopoly nowadays. 10
This system originated in 1850 when the government granted a monopoly concession for gambling, following the example of other industries such as pork and beef distribution. 11 The concession system suited Macau's small market size, as it ensured stable income for both the government and the concessionaires. Macau was a tiny fishing village of about one square mile before the Portuguese arrived in the 16th century, 12 and it only expanded to 4.5 square miles by 1912. 13
Under the concession system, different types of gambling, such as Fantan or Pacapio Lottery, were assigned to different operators through public bidding. This practice still exists today, as casino gaming, horse racing betting, sports betting, and lotteries are run by separate operators who cannot operate other types of gambling than the approved.
iii. The concession period was initially set at eight years with no extension, but it was changed to 25 years in 1964 by Legislative Regulation No. 1649 and then reduced to 20 years in 1982 by Law No. 6/82/M. These changes reflect the reasons behind the Gaming Law 2001, which stipulates that the concession period can be up to 20 years with a possible extension of up to five years under special circumstances.
iv. A casino had to be located inside a building and could not have direct access to the outside. This meant that a casino could only be entered through a special entrance in the building. This tradition still persists for Macau's casinos, even though it is not required by the current laws. Unlike in Las Vegas, visitors in Macau cannot walk into or out of a casino directly from the sidewalk.
v. Certain people, such as Macau residents under 21, non-Macau residents under 18, civil servants, alcoholics, and misbehaving persons, were prohibited from entering or gambling in the casino. This regulation has been maintained in later laws and regulations, except that now all visitors, including non-Macau residents, must be over 21 years old.
vi. The concessionaire had to pay tax and surcharges monthly. The amount was fixed annually according to the tender notice or the contract. This fixed tax regime did not change until 1976 when the concession was renegotiated. 14 Law No. 6/82/M permanently changed the tax regime by providing that the gaming tax would be paid proportionally to the gaming revenue.
vii. A new government agency called the Gaming Inspection Commission, consisting of a chairman and two members, was established to oversee gaming. The concessionaire had to keep accounting books and submit required statements to the Gaming Inspection Commission.
Several amendments to Legislative Regulation No. 1496 were made in the next three decades, with Legislative Regulation No. 1501 in 1961, Legislative Regulation No. 1649 in 1964, Legislative Regulation No. 1760 in 1967, Legislative Regulation No. 1789 in 1969, Legislative Regulation No. 13/72 in 1972 and Law No. 2/84/M in 1984. Despite the revisions, Legislative Regulation No. 1496 was the primary gaming law until it was replaced by the Gaming Law 2001.
Law No. 6/82/M: a meaningful law despite some of the provisions lacking implementation
Law No. 6/82/M was a comprehensive revision of Legislative Regulation No. 1496. It allowed the operation of casino gaming to be granted either by the concession system or by a new special license system. The latter system could have up to four licensees, but this was reduced to three by Law No. 10/86/M in 1986. However, the special gaming license system never took effect, probably due to the strong influence of the existing concessionaire STDM and the impending handover of Macau to China. 15
Nevertheless, Law No. 6/82/M was significant for Macau's gaming industry. First, it set the stage for the Gaming Law 2001, which increased the number of concessions to three. Second, it replaced the fixed tax regime with a new proportional tax system in the form of legislation. According to the new law, the gaming tax had to be at least 26% of the gross gaming revenue (GGR).
III. LEGISLATION ON GAMES OF CHANCE AFTER THE HANDOVER
Overview of Macau's gaming legislation after the handover
Macau was handed over to China in 1999. Ever since then, Macau became a special administrative region (SAR) of China, being able to exercise a high degree of autonomy in a variety of issues including gaming. Article 118 of the Basic Law of the Macau Special Administrative Region of the People's Republic of China stipulates that the Macau SAR shall, on its own, make policies on tourism and recreation, which gaming is tacitly treated as a form of recreation, in light of its overall interest. The clause indicates that the Macau SAR government is allowed to decide whether gaming is legal or not, as well as to determine what policies are for gaming, by itself. Based on the provisions of the Basic Law, several laws and regulations related to gaming have been enacted in Macau after the handover.
The first and primary one is the Gaming Law 2001, i.e., the Legal Framework for the Operations of Casino Games of Fortune (Law No. 16/2001). The law ends the monopoly concession of gaming in the past 150 years and ushers Macau's gaming industry into a new era of competition. The law was amended by Regulating the Conditions for Entering, Working and Gaming in Casinos (Law No. 10/2012) in 2012 16 and Law No.7/2022 in 2022. Another important gaming law is Legal Framework for Casino Gaming Credit (Law No. 5/2004) which legalizes gaming credit provided by concessionaires and gaming promoters.
As of 2022, there are five administrative regulations on gaming, namely,
i. Regulating the Public Tender for Casino Gaming Concessions, the Concession Contract and the Requirements of Suitability and Financial Capacity of Bidders and Concessionaires (Administrative Regulation No. 26/2001) which was amended by Administrative Regulation No. 34/2001, Administrative Regulation No.4/2002 and Administrative Regulation No. 28/2022;
ii. Regulating the Conditions for Accessing and Exercising the Activity of Promoting Casino Gaming (Administrative Regulation No. 6/2002) which was amended by Administrative Regulation No. 27/2009 and eventually replaced by Regulating the Business of Casino Gaming (Law No.16/2022);
iii. Partial Exemption from Commission Tax for Gaming Promoters (Administrative Regulation No. 10/2002) which was amended by Administrative Regulation No. 23/2005 and eventually became invalid due to expiration;
iv. Supply Regime and Requirements for Gaming Machines, Equipment and Systems (Administrative Regulation No. 26/2012); and
v. Specialized Commission of Casino Gaming (Administrative Regulation No. 32/2022).
Formulation of the Gaming Law 2001
Background of the Gaming Law 2001
After Macau was handed over to China in 1999, the newly established Macau SAR government quickly decided to bring more gaming operators in because the monopoly was believed to hinder the growth of Macau's gaming revenue. From 1998 to 1999, Macau's gaming revenue did not rise but fell. In 1998, it decreased by 15% compared with 1997, and in 1999 it decreased by 2% compared with the previous year. 17 Apart from the Casino Lisboa, no more iconic gaming venues could be found in Macau. The gaming facilities in the casino were outdated and the service was deteriorating.
In the late 1990s, the overall economy of Macau was also not in good shape due to the slowdown of casino gaming, the pillar of Macau's economy. Macau's gross domestic product (GDP) was 52.58 billion patacas (1 USD equals around 8 patacas) in 1998, with a real growth rate of -4.6%. It continued to fall to 51.07 billion patacas in 1999, with a real growth rate of -2.9%. 18 In comparison, the gaming industry in Las Vegas and Atlantic City in the United States was booming and entering a new era of integrated resorts dominant rather than just casinos in the 1990s.
As mentioned before, a special licensing system as an alternative to the concession system was adopted by Law No. 6/82/M. Although the licensing system did not become reality, the idea of introducing more operators into the casino gaming industry remained in discussion and was widely accepted in Macau by the 1990s. The Macau SAR government thus believed that it was time to break the long-time monopoly in Macau's gaming industry when it began its governance. Against this background, the Gaming Law 2001 was enacted.
Main content of the Gaming Law 2001
The Gaming Law of 2001 establishes the basic framework and principles for regulating casino gaming in Macau. This law stipulates the following main provisions:
i. The concession system remains in effect for the gaming industry, but the number of concessions increases from one to a maximum of three. The law states that the Macau SAR government retains the right to operate casino gaming and can grant concessions for casino gaming operations to qualified private companies through public tenders. The concession period lasts for up to 20 years, with a possible extension of up to five years in special circumstances. This provision ends the 40-year monopoly of STDM and introduces a competitive era for Macau's gaming industry. Based on this provision, the Macau SAR government awarded concessions to three operators: Galaxy, Wynn, and SJM (a subsidiary of STDM), in 2002; and sub-concessions to another three operators: Sands, Melco, and MGM, between 2002 and 2006. ii. The suitability check is integrated into the law for the concessionaires and the shareholders who hold 5% or more of the company capital, as well as for directors and key employees such as CEOs and CFOs. This mechanism is learned from the United States. However, its implementation needs significant improvement as most of the checks have been just paperwork. iii. The gaming promoters must obtain a license from the government before starting a business and are subject to government supervision. The gaming promoters' role is supposed to bring customers to casinos. However, in Macau, the gaming promoters actually act as contractors of VIP rooms. The VIP rooms operated by the gaming promoters are known as third-party VIP rooms because the gaming promoters do not hold concessions for casino gaming. To operate VIP rooms, they usually have to share gaming revenue with the concessionaires and pay commissions to the customer representatives based on a percentage. The third-party VIP rooms were once the most significant contributors to the gaming revenue. From 2002 to mid-2014, they consistently generated more than 60% of Macau's gaming revenue, and even surpassed 70% in some years.
19
After mid-2014, as Macau's gaming revenue declined overall due to the recession of the Chinese economy, the share of third-party VIP-room gaming revenue fell below 60%, but it still remained relatively high.
20
Major revisions of the Gaming Law 2001
The Gaming Law 2001 was revised for the first time in 2012 by the Regulation of Conditions for Entering Casinos, Working and Gaming in Casinos (Law No. 10/2012). The new law enhanced the responsible gaming measures and addressed some gaps in the Gaming Law 2001. The revision was triggered by an incident in 2007 when a 16-year-old girl, accompanied by her mother, won a jackpot on a slot machine in a casino. Although minors were banned from entering casinos, the law did not specify whether the prize should be awarded to an underage winner. Moreover, the law did not stipulate how to penalize the parent who brought the minor to the casino. The girl eventually received the prize, but the decision of the regulatory body was controversial. 21
The main amendments of Law No. 10/2012 are:
i. The minimum age for entering casinos was raised from 18 to 21.
ii. No prize would be given to the winner who was prohibited from entering a casino. Instead, the prize, along with the stake, would go to the government treasury.
iii. The legal representative of a minor or an interdicted person who accompanied them to enter the casino would be fined.
iv. A self-exclusion program was offered to the applicants. Under the program, the Director of the Gaming Inspection and Coordination Bureau (DICJ) could ban applicants from entering casinos for up to two years and the period was renewable.
Law No. 10/2012 was amended again by Law No. 17/2018 in 2018. This amendment forbade certain front-line employees who worked at gaming tables, gaming machines, cashier counters, public relations, catering, cleaning, security, and surveillance, as well as employees of gaming promoters, from entering a casino when they were off duty. The amendment, according to the government, was based on some research that showed that the rate of problem gambling among gaming employees was higher than that of non-employees, probably due to their prolonged exposure to gaming.
The Gaming Law 2022 and its supplementary regulations
The last amendment to the Gaming Law 2001 took place in 2022 through Law No. 7/2022, which was triggered by the expiry of the 20-year concessions that started in 2002. As a result, the Macau SAR government needed to formulate rules for re-granting and respond to the problems arising from implementing the Gaming Law 2001.
The most important amendments to Law No. 16/2001 are as follows:
i. Promoting economic diversification is included as an important part of the gaming public policy. Article 1-A of the Gaming Law 2022 declares that gaming operations should promote adequate diversification and sustainable development of the economy of the Macau SAR.
Macau has long been concerned about its heavy reliance on gaming. From 2002 to 2019, gaming revenue accounted for more than 50% of government revenue, with 51%–69% from 2002 to 2009 and 76%–80% from 2010 to 2019. 22 Additionally, the gaming industry employs the largest number of workers among all industries in Macau. From 2013 to 2020, more than 80,000 Macau residents worked in the gaming industry each year, accounting for more than 20% of the total employed population in Macau. 23
if the gaming industry does not do well, it could negatively impact the entire economy of Macau. The fact that Macau was heavily hit by the Covid-19 pandemic during the period of 2020–2022 accelerated this worry. The Macau SAR government thus emphasizes economic diversification and demands that gaming concessionaires invest more in non-gaming activities. Concessionaires would be held accountable if they could not meet their commitments included in tenders or concession contracts.
ii. The maximum number of casino gaming concessions shall be six and no sub-concession shall be permitted anymore. According to the Gaming Law 2001, three companies were granted a concession of casino gaming in 2002. However, in 2002 and 2004, three more companies were allowed to operate casino gaming in Macau through a so-called sub-concession regime, which lacked legal basis. The maximum number of casino gaming concessions shall be six, and no sub-concession shall be permitted anymore. This expansion of concession numbers is to accommodate the six incumbent operators and prevent infamous sub-concessions from taking place again.
iii. The new concession period shall be 10 years rather than the 20 years provided in the Gaming Law 2001. The Macau SAR government believes that it is easier to control the industry if given a shorter period of concession. Additionally, the new concessionaires after the re-grant in 2022 would continue to use the casinos established and would not need a long time to build new properties.
iv. The amendment places several restrictions on gaming promoters. For example, gaming promoters are no longer allowed to lease an area as a VIP gaming room from a concessionaire or share gaming revenue proportionally with the concessionaire for operating the room. A gaming promoter can only serve one concessionaire, rather than multiple concessionaires simultaneously as before, and receive commission only from the same concessionaire for bringing customers in. These amendments aim to end illegal practices that have been popular in Macau for decades. Under the concession system, only the concessionaires are authorized to operate gaming in Macau, while non-concessionaires such as gaming promoters have always tried to find ways to enter the market.
v. Casinos that are co-operated by a third-party investor and a concessionaire will be given three years for transition. Once the period expires, third-party operators must either close such casinos or continue to operate them as a management company of the concessionaire. If they choose to continue operating, they will only collect management fees from the concessionaire rather than share gaming revenue proportionally with it.
With the Gaming Law 2022, the Macau SAR government has promulgated Rules for Operating Games of Chance in Casinos (Law No. 16/2022) to further regulate the casino business. Although the new law involves all participants of casino gaming, it focuses on business carried out by gaming promoters and management companies. The law stipulates the scope and standards of suitability check for gaming promoters, their collaborators, and management companies; guarantee for gaming promotion business; rules for engaging in gaming junket business; conditions and rules of conduct for the collaborators of gaming promoters and management companies; and provisions of joint liability and punishment. The new law replaces Regulating the Conditions for Accessing and Exercising the Activity of Promoting Casino Gaming (Administrative Regulation No. 6/2002) which regulated the conditions for accessing and exercising the activity of promoting casino gaming.
The promulgation of the Legal Framework for Casino Gaming Credit
Macau legalized gaming in 1847, but gaming credit has never been permitted. Article 13 of the Illegal Gambling (Law No. 8/96/M) promulgated by the Portuguese colonial government in 1996 stipulates that anyone who provides money or any other resource to others for gambling will be punished equivalently to the crime of usury.
However, credit gaming is considered one of the most important factors for casinos to make money. It makes it easier for gamblers, especially high-end ones, to participate in gaming activities by saving them from carrying lots of cash. In 2004, the Macau SAR government promulgated the Legal Framework for Casino Gaming Credit (Law No. 5/2004), which allows concessionaires and gaming promoters to provide credit to gamblers, and the gaming debts arising therefrom are regarded as legal debts. This law has significantly contributed to the booming of Macau's gaming industry in the past two decades.
The law is currently being revised in the Legislative Assembly of Macau and is expected to be completed within 2023. The most significant revision is that a management company of a concessionaire, which refers to casinos co-operated by a third-party investor and a concessionaire, will no longer be allowed to issue credit to gamblers.
IV. LEGISLATION ON THE OTHER TYPES OF GAMING BESIDES CASINO
Horse racing betting
Horse racing began to appear in Macau as early as 1842, but organized horse races were not held until 1927. 24 Horse racing relied heavily on the gamblers from Hong Kong, and they were forced to close in early 1942 because Hong Kong was invaded and occupied by the Japanese from 1941 to 1945. 25
In January 1989, a Taiwanese company obtained the concession of horse racing betting in Macau. The company organized its first horse race on September 11, 1989. 26 However, due to the consistently low betting amount, the company could not last long and was acquired by STDM in 1990. 27 As per the regulation, the Portuguese colonial government promulgated Regulations for Horse Racing and Mutual Betting (Ordinance No. 163/90/M) which was revised later by Ordinance No. 270/95/M, Ordinance No. 12/98/M, and Executive Order No. 13/2001 after the handover to China. The main content of Ordinance No. 163/90/M is still valid today.
Three regulations on horse racing have been promulgated after Macau returned to China. They are Rules for Betting Quinella of the Classifieds in Horse Racing (Executive Order No. 20/2000), Rules for Betting Triple Trio in Horse Racing (Executive Order No. 47/2001), and Regulation for Placing Bets via the Internet in Horse Racing (Dispatch No. 63/2003 of the Secretary for Economy and Finance).
Greyhound racing betting
Greyhound racing betting was introduced to Macau in 1932 by a group of overseas Chinese and American businessmen who organized the Macau Greyhound Club and built a greyhound racing track. 28 Like horse racing betting, greyhound racing betting was forced to close in early 1942.
Cheung Kuan Pau, an overseas Chinese from Indonesia, obtained the concession of greyhound racing in 1961, but he did not successfully operate the racing, as well as the betting. 29 He yielded the concession in 1963 to the Macau Yat Yuen Canidrome Co. Ltd which organized the first greyhound race on September 28, 1963. 30 The event marked the resumption of Macau's greyhound racing which was interrupted for more than two decades. In July 1984, STDM, the casino concessionaire, became the major shareholder of Macau Yat Yuen Canidrome Co., Ltd. 31
To regulate greyhound race betting, the Portuguese colonial government formulated the Regulations for Greyhound Racing, the Totalizer and the Cash Sweep Lotteries (Ordinance No. 7611) in August 1964, which was later amended by Ordinance No. 7727, Ordinance No. 8189, Ordinance No. 80/78/M, Ordinance No. 123/88/M and Ordinance No. 121/90/M. In addition to this frame regulation, the Portuguese colonial government also promulgated Regulation of Mutual Betting Dupla-Trifecta (Ordinance No. 151/91/M), Rules for the All-Up Quinella Betting Mode on Greyhound Racing (Ordinance No. 132/94/M) and Regulation of Mutual Betting Triple-Trio Three T's (Ordinance No. 93/97/M).
After the handover in 1999, the Macau SAR government has promulgated three regulations, namely Rules for Betting Quinella of the Classifieds in Greyhound Racing (Executive Order No. 53/2000), Regulation for Placing Bets via the Internet in Greyhound Racing (Order No. 64/2003 of the Secretary for Economy and Finance) and Regulation of Mutual Betting on Greyhound Racing “Odd or Even Number” (Dispatch No. 75/2009 of Secretary for Economy and Finance).
Although in 2017 the Macau SAR government extended the greyhound racing concession contract to July 20, 2018, it required the concessionaire to move from the original site due to it being too close to the residential buildings. The concessionaire failed to find a new site and had to end the greyhound racing betting which had lasted more than half a century. The last greyhound race was completed on June 30, 2018.
Sports betting
As a well-known gambling town, Macau took the first step in Asia to legalize its football (soccer) betting in 1998. 32 To catch up with the 1998 FIFA World Cup, the Macau government did not conduct public tender as it had done to casino gaming. Instead, it granted the concession of football betting directly to Macau SLOT (SLOT – Sociedade de Lotarias e Apostas Mútuas de Macau, Lda.), which had already been granted the concession of lottery, and allowed the company to operate football betting as a type of lottery. 33 On the same day of granting the concession on June 5, 1998, the Macau government issued Regulation of the Sports Lottery – Betting on Football (Ordinance No. 138/98/M), which was later amended by Ordinance No. 432/99/M, Executive Order No. 21/2000 and Chief Executive Order No. 37/2005.
The Macau SAR government approved Macau Lottery Co., Ltd. to operate Sports Betting – Basketball Lottery in Macau and issued a Regulation for Sports Betting – Basketball Lottery (Executive Order No. 25/2000) on April 27, 2000. With this regulation, Macau became the first place to permit basketball betting in Asia. On December 5, 2000, the Secretary issued Dispatch No. 115/2000 to approve online basketball betting and extend the Sports Lottery – Football Betting via the Internet to basketball betting. A new Regulation for Sports Betting – Basketball Lottery (Executive Order No. 20/2005) was issued in 2005, which expands the choices of games and betting opportunities.
On June 21, 2000, the Secretary for Economy and Finance issued Sports Lottery – Football Betting via Internet (Dispatch No. 77/2000), approving online betting of Football Lottery by Macau Lottery Co., Ltd. In April 2018, the Chief Executive issued Executive Order No. 67/2018, approving the new “Sports Betting – Football Lottery” regulations which overhaul the old regulation issued by the Portuguese colonial government by, for instance, expanding the choices of games and betting opportunities. In 2019, Rules of Execution for the Placement of Bets for Sports Lotteries (Dispatch No. 38/2019 of the Secretary for Economic and Finance) was issued to regulate all three means of placing bets, which are onsite betting, betting via phone calls, and via the internet. This new regulation replaces Dispatch No. 77/2000 which was only applied to internet betting.
In terms of the Chinese lottery, the Macau SAR government issued the new Regulations for Betting the Lottery Pacapio (Executive Order No. 8/2004) in 2004, which abolished Order No. 229/92/M issued by the Portugal colonial government. The new regulation increases betting choices and the types of awards, as well as providing clearer rules for operation.
Lottery
A variety of lotteries existed in the history of Macau gambling. Most of them, however, have lost their attractiveness and cannot be found in Macau nowadays. The only lotteries still in operation are Pacapio Lottery and Instant Lottery.
The Instant Lottery began selling in Macau in December 1984. 34 It was approved and regulated by the Regulations of Instant Lottery (Ordinance No. 76/84/M), which was revoked by Ordinance No. 52/85/M in 1985. The latter was replaced by Ordinance No. 27/86/M in 1986.
In November 1990 the Macau government issued Regulations for Betting the Pacapio Lottery (Ordinance No. 222/90/M) which was replaced by Ordinance No. 229/92/M in 1992. The game is said to originate from a pigeon (Paca means white pigeons in Cantonese) betting. The operator chose 80 Chinese characters to number the pigeons, and then released the pigeons to let the betters guess which pigeon will win. The game has now been switched to a computer lottery since December 1990. 35
V. CRIMINAL LAWS AGAINST ILLEGAL GAMBLING
Formulation of the law against illicit gambling
Legalized gaming is the backbone of Macau's economy as most of the tax revenue is from gaming. To crack down on illegal gaming, the Macau government enacted Illicit Gambling (Law No. 9/77/M) in 1977. The main provisions of the law are: (i) operating games of fortune, illegal lotteries and mutual betting outside the places permitted by law shall be punished with imprisonment and fines; (ii) the people found to play games of fortune, or even be present only, outside the places permitted by law shall be fined; repeat offenders shall be put into the prison from three months to one year, or be fined with the equivalent amount provided by the act; and (iii) the people providing loans with interest to gamblers shall be jailed and fined. The Macau government replaced Law No. 9/77/M with Law No. 8/96/M in 1996. The new law keeps most of the content of the old law but increased the penalties against offenders.
Formulation and revision of anti-money laundering and anti-terrorism laws
Two other laws, Prevention and Suppression of Money Laundering Crimes (Law No. 2/2006) and Prevention and Suppression of Terrorist Crimes (Law No. 3/2006), are crucial for Macau to deal with money laundering in casinos.
The Macau SAR government started to attach importance to anti-money laundering and anti-terrorist financing at the beginning of this century. It enacted Prevention and Suppression of Money Laundering Crimes (Law No. 2/2006), Prevention and Suppression of Terrorist Crimes (Law No. 3/2006) Law) and Prevention of Money Laundering and Terrorist Financing Crimes (Administrative Regulation No. 7/2006) in 2006, all of which have been applied to casino gaming, which is usually involved in a large number of cash transactions.
The Macau SAR government made an overall revision to the above-mentioned laws and administrative regulations on anti-money laundering and anti-terrorist financing by enacting Law No. 3/2017, which revised Law No. 2/2006 and Law No. 3/2006, and Administrative Regulation No. 17/2017, which revised Administrative Regulation No. 7/2006. The revisions in 2017 were mainly in response to the 40 newly revised recommendations of the Financial Action Task Force (FATF) and to improve the findings of the Asia/Pacific Group (APG) on Money Laundering assessment of Macau in 2006.
Criminal laws against greyhound and horse racing betting
In addition to the above-mentioned laws and regulations for the operation of greyhound racing and horse racing betting, the Portuguese colonial government also promulgated the relevant criminal law named Criminal Offenses Related to Animal Racing (Law No. 9/96/M) which still retains its validity today.
VI. CONCLUSIONS: HERITAGE AND CHANGE
Macau's gaming laws have come a long way since the legalization of gambling. Today, they include more than a hundred legal documents that cover casino gaming, horse racing betting, greyhound racing betting, sports betting, and lottery. The existing laws and regulations were not achieved overnight but developed gradually. In particular, the unique gaming concession system has experienced more than 170 years of development. Therefore, it is difficult to fully understand modern Macau gaming law without understanding its historical development.
Macau's gaming industry is a process of continuous learning and growth. At the beginning of the legalization of gambling in Macau, only Chinese-style gambling games were available. Since the 1960s, Western-style games have been introduced and have become the mainstay while few Chinese-style games have been left. In terms of regulation, Macau has learned from the gaming laws of other countries, especially the United States, since the 2000s. For example, the suitability check, which originated from Nevada gaming laws, has been introduced in Macau through the Gaming Law 2001. The system was originally applied to shareholders, directors, and top-rank key employees but has now expanded to apply to middle-rank employees and even ordinary employees whom the regulatory authority believes necessary to apply. Over time, the regime is expected to play a more significant role in regulating Macau's gaming because the Macau SAR government is stepping up measures to supervise the gaming industry.
However, long-standing traditions can often hinder progress, as is the case with Macau's gaming concession system. Under this system, the number of gaming operators is limited, and there is a cap on the operating period. The grant of a concession is subject to a lengthy procedure that can take several months to complete. This system seems rigid and clumsy, making it difficult for the government to respond quickly to market changes when more gaming operators are needed. Additionally, it is challenging for gaming operators to enter or exit the market during the gaming operation period. In contrast, many other jurisdictions, such as Nevada in the United States, have adopted a licensing system that does not limit the number and duration of gaming operators. Operators can enter or exit the market more freely, allowing them to adapt more quickly to changes in the market.
The historical path dependence has hindered Macau from adopting an alternative system that might be more beneficial to the continuing success of the Macau gaming industry. During the recent revision of the gaming law, advocates of switching to a licensing system did not receive a response from lawmakers. The discussion on the revision remained focused on how many concessionaires there should be and how long their concession period should last. Ultimately, Macau chose to stick with the concession system once again. The new concessions will begin in 2023 and last until 2033. Whether Macau can break through its path dependence by then remains a question that will only be answered in at least ten years.
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