A step forward
The Macau legislature has voted 32-1 in favor of a new gambling law bill. Tuesday’s final vote by the Legislative Assembly followed a second reading of the legislation, which will give Macau’s government a greater level of oversight of the operations of casinos. It also allows officials to start with the process of issuing new licenses for casino operators. The current licenses expire at the end of 2022.
much greater powers to punish casino operators
There were a few standout changes in the new gambling law bill. Officials will have much greater powers to punish casino operators when they are deemed to be in violation of regulations. Taxes on gaming revenue will rise by 1% to 40%, with the term lengths of casino licenses dropping from 20 years to ten years.
Macau Secretary for Economy and Finance Lei Wai Nong believes the new legislation is a big step forward for the region, saying that “The government hopes to develop overseas visitors through the concessionaires, because the development of foreign visitors is vital to promoting Macau as a world tourism and leisure center.”
Concerns over the reliance on gambling revenue
One of the main reasons for the gambling law changes is mainland China’s concerns that Macau is overly reliant on gambling revenues. There is now a push to diversify the special administrative region’s economy into areas like finance, technology, tourism, events, and medicine.
a significant crackdown on Macau’s high-roller gambling scene
There has also been a significant crackdown on Macau’s high-roller gambling scene. Concerns remain about the capital outflow from mainland China to the likes of Macau. There are now much tighter restrictions on high roller operations.
The expectation is that each of the six casino companies that are currently operating in Macau will get temporary extensions to their licenses during the new tender process. There could be changes made to the licensing fees, as well as possible commitments relating to non-gaming investments that operators make in the region.
A tough time for casinos
The rollout of stricter gambling laws in Macau comes at a time when there are significantly dampened casino sector revenues because of the COVID-19 pandemic. Gambling revenue has dropped significantly from pre-pandemic levels. Many casino operators are dealing with mounting debt and are taking measures to avoid liquidity problems.
As a result of the continuing pandemic-related travel restrictions in many parts of mainland China, there looks to be no immediate end in sight for these struggles. Macau is also in the middle of a significant COVID-19 outbreak of its own, with most non-essential businesses and schools closing their doors.