Under the current legal and regulatory framework, there are four types of permitted gaming in the Macau Special Administrative Region of the People's Republic of China (hereinafter, Macau or MSAR):
- games of chance, defined as 'those in which the result is contingent because it depends exclusively or mainly on the luck of the player';
- pari-mutuel (animal racing – horse and greyhound only), defined as a 'system of betting on animal racing or a sporting event in which the winners split the total amount bet, after deduction of commissions, fees and taxes in proportion to the amount individually bet';
- operations offered to the public, defined as 'those in which the hope of winning resides solely on luck, such as lotteries,2 raffles, tombola and sweepstakes'; and
- interactive gaming, defined as 'games of chance in which (a) a prize in cash or other value is offered or may be won under the respective rules, (b) a player enters or participates in the game by means of telecommunication, namely by means of telephone, telefaxes, internet access, data networks, the transmission of video signals or digital data, and to do so, either agrees to make payments in cash or any other value, and (c) the game is also offered or approved as a game of chance or through an electronic or mechanical gaming machine in casinos'.
Gaming promoters (also known as junkets) are defined as 'the companies that carry out the activity of promoting casino games of chance', which is defined as 'the provision of facilities to players, namely as regards transportation, accommodation, food and entertainment, receiving, in return, a commission paid by the concessionaires, in the amount not exceeding the legally established limit' (1.25 per cent of the net rolling, regardless of the basis for calculation).
Gaming machines are defined as 'any device, including gaming programs and associated software, memory compartment, random number generator and storage media for the gaming programs operated wholly or partially by electrical, electronic or mechanical means and designed, adapted or programmed to (1) the practice of a game, the outcome of which depends solely or mainly on luck; (2) payment, as a result of a bet placed on a gaming machine, of a cash prize, gaming chips, tickets redeemable for cash or goods convertible to gaming chips, cash or cash equivalents'.
Extension of credit for casino gaming is defined as 'the transmission of the ownership of casino gaming chips from a credit provider to a third party without the immediate payment in cash or equivalent of such transmission'.ii Gambling policy
Macau law departs from a principle of prohibition: all forms of commercial gambling are prohibited if not permitted by law.
Public policy in relation to gaming is defined in Article 1-A of the Gaming Law, as amended, and aims to ensure:
- that the exploitation and operation of casino games of chance are carried out under the premise of safeguarding national security and that of the MSAR;
- the promotion of adequate diversification and sustainable development of the MSAR's economy;
- the exploitation and operation of casino games of chance in a fair and honest manner;
- the exploitation of casino games of chance free from criminal influence, ensuring that the exploitation and operation of casino games of chance are in line with the MSAR's policies and mechanisms in respect of combating the illegal flow of cross-border capital and preventing money laundering and terrorism;
- the dimension and operation of casino games of chance, as well as the practice of casino games of chance, are subject to legal restrictions;
- those involved in the supervision, exploitation, management and operation of casino games of chance are suitable for the exercise of such functions; and
- the interests of the MSAR in collecting taxes and other duties resulting from the operation of casinos is duly protected.
Under Macau law, and although an activity reserved for the MSAR, the operation of gaming by an entity other than the MSAR is subject to a prior concession being granted by the MSAR. A public tender is required only for casino gaming. There were exceptions for interactive gaming (for which no regulation was enacted and hence no concession was ever granted), and pari-mutuels and operations offered to the public that are granted in exclusivity to a single entity. The exclusivity was removed in the 2021 amendment to the instant lotteries concession contract (under which sports lottery is offered, i.e., for football and basketball).
Pursuant to the Gaming Law, the MSAR is precluded from granting more than six casino gaming concessions.
The MSAR is a permanent gaming zone. Thus, casinos shall be open 24/7, and only in exceptional cases and at the request of the Chief Executive or with his authorisation can casino concessionaires suspend the operation of a casino or adjust its operating hours. The Chief Executive determines the resumption of casino operations.
The minimum age for entering, playing and working in casinos is 21. Restrictions to casino entry apply to certain categories of casino concessionaire employees. The minimum age for participating in pari-mutuel and operations offered to the public is 18 years old, Macau's legal age.
A complete ban on smoking inside casinos has been in force since 1 January 2019.
Casino concessionaires can only operate casino games of chance whose rules are approved by order of the Secretary for Economy and Finance after a proposal from the Gaming Inspection and Coordination Bureau (hereinafter DICJ) or following the request of the casino concessionaires. Such approval and rules are published in Macau's Official Gazette. Furthermore, casino concessionaires shall submit, annually, during December, to DICJ a list specifying the number of gaming tables and machines they intend to operate during the following year and their respective locations. Casino concessionaires are bound to keep and operate a minimum variety of games in their casinos, pursuant to DICJ's instructions.
As to horse racing, the following pari-mutuels in relation to horse-racing results are permitted: pari-mutuel winner, pari-mutuel places, quinella, forecast, double win, double quinella, trio, trifecta, triplo vencedor, quarteto and six up. Regarding horse-racing results, the following lotteries are also permitted: cash sweep (ordinary and special), winner sweep and places sweep.
According to the horse racing concession contract, the rules for pari-mutuels that are authorised are approved by the Chief Executive after a proposal from the operator, and published in Macau's Official Gazette.
As to sports lotteries, only bets on football and basketball are permitted.
If an operator requests authorisation to operate new lotteries, it shall enclose a draft of the rules with the authorisation request for the DICJ's approval. The rules are published in Macau's Official Gazette.
As to Chinese lotteries, only pacapio and chumpapiu lotteries can be offered.
According to the respective concession contract, the rules of the Chinese lotteries authorised by the concession contract are approved by the Chief Executive after a proposal from the operator. If the operator requests authorisation to operate new lotteries, it should enclose a draft of the rules with the authorisation request for DICJ's approval. The rules are published in Macau's Official Gazette.
Casino gaming is under the continuous and permanent supervision of DICJ through a team of inspectors on site.
The First Division of DICJ's Games Inspection Department is responsible for supervising and monitoring casino frequency and operations and ensuring the performance of all legal, regulatory and contractual precepts related to games of chance.
Regarding pari-mutuels and operations offered to the public, the Second Division of DICJ's Games Inspection Department supervises and monitors all non-casino gaming operations. Moreover, the non-casino gaming operators have a government-appointed delegate to follow the operator's activities.
Pursuant to Macau law, only casino concessionaires may, as credit providers, extend credit to players. Issuance of credit is restricted to casino games of chance.
Casino concessionaires shall not transfer to a third party the right to operate a casino or a gaming area. Transferring or encumbering shares to third parties in a casino concessionaire requires the Secretary for Economy and Finance's authorisation.
The MSAR may sequester a concession when an unjustified suspension occurs or is imminent, or serious deficiencies in the organisation of the concessionaire or the general condition of the premises or material used for the operation of the concession are verified.
The Chief Executive may, after consulting the Specialised Commission of the Games of Chance (hereinafter Gaming Commission), rescind the casino concession under the following grounds:
- threat to national security or the security of the MSAR;
- agreement with the casino concessionaire;
- casino concessionaire's failure to fulfil its obligations;
- public interest; and
- lack of suitability.
The casino concession can also be redeemed before its term, in which case the casino concessionaire is entitled to compensation.
In addition, Chief Executive may unilaterally terminate the casino gaming concession due to the failure of the concessionaire to comply with fundamental (legal or contractual) obligations.
If not owned by the MSAR, the property of all casinos, gaming equipment and utensils (including those outside the casino premises) are to revert to the MSAR by the term of the concession. The reversion is automatic and without entitlement to any compensation to the casino concessionaire. The enjoyment, fruition and use of the assets reverted may be temporarily transferred to be used in gaming operations by the same or a different casino concessionaire in return for remuneration. As to the horse racing concession, all premises (except the electrical station, totaliser and all movable assets the horse-racing operator decides to remove within 60 days following the reversion) revert to the MSAR by the term of the concession without compensation.
Gaming machines (including electronic table games) can only be operated by casino concessionaires. They shall comply with the Macau Technical Standards (on electronic gaming machines (EGMs) and electronic table games, for accumulated prizes in gaming machines and for dealer-operated electronic table games, all approved by DICJ instructions) and be certified by an authorised gaming testing laboratory. The supply of gaming machines in Macau can only be conducted by licensed manufacturers or distributors authorised by DICJ.
The greyhound racing concession expired in 2018 and, to date, the government has not granted any new concession for operating greyhound racing; nor has it revoked its legal framework.
Nevertheless, it seems public policy not to award a concession for this type of gaming anywhere in the future.iii State control and private enterprise
Gaming, in all forms, is a highly regulated activity in Macau, and the supervision of gaming activities relies primarily on DICJ and the Financial Services Bureau.
Pursuant to Macau law, the commercial operation of gaming is reserved to the MSAR and can only be granted to private entities by means of a concession through an administrative contract. Macau utilises a concession system (not a licensing system), and the current situation is of monopoly for horse racing and lotteries (which include sports lotteries) and of oligopoly (restricted to six operators) for casino games of chance.
Casino concessionaires must be incorporated in the MSAR as limited liability companies, and statutory requirements regarding, among others, its share capital, business scope and managing director apply.iv Territorial issues
Macau is the only jurisdiction in the People's Republic of China (PRC) where casino gaming is lawful.
Article 118 of the Macau Basic Law states that the Macau Special Administrative Region 'shall, on its own, make policies on tourism and recreation in the light of its overall interests'.
Hence, gambling is regulated at the level of the MSAR, which, under the Macau Basic Law, exercises a high degree of autonomy, pursuant to an authorisation of the National People's Congress of the PRC, enjoying executive, legislative and independent judicial power, including that of final appeal.3v Offshore gambling
Offshore gambling involving sectors such as online casinos and multiplayer online gaming is not permitted in Macau.
Placing bets over the phone or online is regulated for horse racing, greyhound racing and sports lottery.
There have been reports on international cooperation over offering online gaming to the Macau market. Still, it is debatable whether betting on foreign offshore gambling platforms by Macau residents is an unlawful activity under the laws and regulations in Macau, as there are no grounds for acting against foreign operators when the placement of bets or wagers is made on a cross-border basis.
Legal and regulatory frameworki Legislation and jurisprudence
The main legal and regulatory framework for casino gaming, pari-mutuels and operations offered to the public comprises the following.Games of chance
- Law No. 8/96/M of 22 July 1996 (illegal gambling);
- Law No. 16/2001 of 24 July 2001 (Macau Gaming Law), amended by Law No. 7/2022 of 22 June 2022;
- Law No. 5/2004 of 14 June 2004 (extension of credit for casino gaming);
- Law No. 10/2012 of 27 August 2012 (entry, work and gaming restrictions in casinos), as amended;
- Law No. 16/2022 of 16 December 2022 (regime of operation of casino games of chance);
- Administrative Regulation No. 26/2001 of 29 October 2001 (public tender regulation), as amended;
- Administrative Regulation No. 26/2012 of 26 November 2012 (gaming machines regulation);
- Administrative Regulation No. 32/2022 of 27 July 2022 (Macau Gaming Commission);
- Administrative Regulation No. 54/2022 of 7 December 2022 (reduction or exemption of additional contributions);
- Administrative Regulation No. 55/2022 of 21 December 2022 (regulation of the regime of operation of casino games of chance);
- Dispatch of the Chief Executive No. 161/2022 of 26 August 2022 (maximum limit of tables and machines per concessionaire);
- Dispatch of the Chief Executive No. 162/2022 of 26 August 2022 (minimum annual amount of gross gaming revenue (GGR) per table and machine);
- Dispatch of the Chief Executive No. 216/2022 of 9 December 2022 (criteria for reduction or exemption of additional contributions);
- Dispatch of the Secretary for Economy and Finance No. 64/2022 (key employees);
- Dispatch of the Secretary for Economy and Finance No. 90/2022 (limit to the commissions payable to gaming promoters);
- Governmental guidelines: particularly from DICJ, which occasionally releases instructions on certain issues related to casino operations. These guidelines, not always published, are mandatory and applicable to all gaming operators in Macau. Despite the fact that they do not carry the same weight as applicable laws, penalties may be enforced if they are infringed. DICJ's guidelines include operational matters regarding, inter alia, electronic table games, preventive measures for the crimes of money laundering and terrorism financing, dealer-operated electronic table games and minimum internal control requirements.
- Casino concession contracts (signed with Wynn Resorts (Macau) SA, MGM Grand Paradise, SA, Galaxy Casino, SA, SJM Resorts, SA, Venetian Macau, SA and Melco Resorts (Macau), SA, on 16 December 2022, effective as from 1 January 2023, for a term of 10 years), which detail the rights and obligations of the casino concessionaires in accordance with the applicable legal and regulatory framework. One of the most relevant clauses established in the contracts is that all legal disputes arising from the contracts shall be exclusively governed and resolved under Macau law and in Macau courts. The laws and courts of other jurisdictions cannot bypass the Macau legal system.
Pursuant to the Gaming Law, the Chief Executive, by means of administrative regulation, determines the rules and specific conditions under which the operation of games of chance is permitted outside casinos (aboard vessels and aircraft, and restricted to gaming machines in the Macau International Airport). However, no administrative regulation has been enacted; nor has the MSAR authorised any operation of games of chance outside casinos.Pari-mutuelsHorse racing
- Executive Order No. 163/90/M of 27 August 1990 (horse racing and pari-mutuels), as amended;
- Law No. 9/96/M of 22 July 1996 (criminal offences related to animal racing);
- Decree Order No. 12/98/M of 9 February 1998 (triple-winner, double-quinela, double-trio and six-up betting);
- Executive Order No. 22/2000 of 3 April 2000 (classified quinela betting);
- Executive Order No. 47/2001 of 30 October 2001 (triple-trio betting);
- Order of the Secretary for Economy and Finance No. 63/2003 of 15 August 2003 (horse racing betting via the internet); and
- Concession contract signed with Macau Horse Race Company Limited, dated 4 August 1995, as amended from time to time, currently extended to 31 August 2042.
- Decree Order No. 7611 of 26 August 1964 (regulation for greyhound racing, the totaliser and cash sweep lotteries), as amended from time to time;
- Decree Order No. 151/91/M of 12 August 1991 (double-trifecta betting);
- Decree Order No. 132/94/M of 24 May 1994 (all-up quinella betting);
- Decree Order No. 93/97/M of 5 May 1997 (triple-trio betting);
- Executive Order No. 53/2000 of 17 August 2000 (classified quinela betting);
- Order of the Secretary for Economy and Finance No. 64/2003 of 15 August 2003 (greyhound racing betting via the internet); and
- Order of the Secretary for Economy and Finance No. 75/2009 of 14 July 2009 (odd or even number betting).
Although no greyhound racing concession is currently awarded (the last expired on 20 July 2018), the above-mentioned legislation is still in force.Operations offered to the publicChinese lotteries (chimpupio and pacapio)
- Executive Order No. 8/2004 of 3 March 2004 (official pacapio lottery regulation); and
- Concession contract signed with Sociedade de Lotarias Wing Hing, Limitada, dated 24 August 1990, as amended from time to time, currently extended to 31 December 2023.
- Executive Order No. 27/86/M of 1 February 1986 (instant lottery regulation);
- Law No. 12/87/M of 17 August 1987 (instant lottery operation);
- Executive Order No. 20/2005 of 27 May 2005 (sports lottery – basketball);
- Executive Order No. 67/2018 of 20 April 2018 (sports lottery – football); and
- Concession contract signed with Sociedade de Lotarias e Apostas Mútuas Limitada, dated 21 February 1989, as amended from time to time, currently extended to 5 June 2024.
No legal framework has ever been enacted.Other relevant legislation
Administrative Regulation No. 19/2021 of 21 June 2021.ii The regulator
The Chief Executive has the highest executive power in relation to gaming matters, which can also be exercised by the Secretary for Economy and Finance, either directly or pursuant to a delegation of powers, and DICJ.
The oversight of gaming is, prima facie, the responsibility of DICJ, the regulatory authority of all types of permitted gaming, a department within the government structure and under the Secretariat for Economy and Finance entrusted with the responsibility of assisting in the definition of the public policy of the gaming sector and its execution, as well as for the regulation, supervision and coordination of the operation and gaming activities.Other government entities
The Gaming Commission is a consultative body of, and is presided over by, the Chief Executive, and is responsible, among other things, for formulating policies and facilitating the development of Macau's casino gaming and relevant regulatory framework. Pursuant to the amendments introduced into the Gaming Law and the enactment of new laws and regulations during the course of 2022, the role of this Commission is more active, as the Chief Executive must hear its opinion before deciding on important matters.
The Financial Services Bureau, under the Secretariat for Economy and Finance, is also vested with regulatory powers concerning, in particular, the accounting of gaming operators and gaming promoters. Concurrently with the DICJ, it may determine an extraordinary casino concessionaire or a gaming promoter audit.
The judiciary police, under the Secretariat for Security, has a special unit with exclusive powers to investigate gaming-related crimes committed in casinos or other gaming venues or their surroundings.
Under the Secretariat for Security, the Financial Intelligence Office, created to collect, analyse and disseminate information to the relevant authorities concerning anti-money laundering (AML) and counter-terrorist finance, is responsible for receiving and processing suspicious transactions reports filed by gaming operators and gaming promoters.
The Social Welfare Bureau and the Health Bureau, under the Secretariat for Social Affairs and Culture, handle problem gambling issues and supervise the casino smoking ban, respectively.iii Remote and land-based gambling
To date, no laws or regulations on the operation of interactive gaming have been enacted. As announced by the government several times, interactive gaming will not be a topic for consideration any time soon, partly due to the sensitive political issues it raises.iv Land-based gambling
Casinos are defined under the Gaming Law as places and premises authorised by the Chief Executive to operate casino games of chance. The use of casinos is reserved for casino concessionaires, which can only, with some exceptions, operate casino games of chance in properties wholly and directly owned by them or owned by the MSAR.
All casinos must identify and clearly demarcate the following areas:
- the gaming floor;
- the treasury (cage);
- surveillance of casinos and ancillary areas;
- transport, deposit, storage and custody of gaming chips and cash;
- count rooms for gaming chips and cash;
- electromechanical, water supply and similar facilities; and
- other logistic services areas as defined in the concession contracts.
Exceptionally, casino concessionaires may be authorised by the Secretary for Economy and Finance to carry out operations offered to the public.v Remote gambling
Private entities may be granted a concession for the operation of interactive gaming.
Casino concessionaires cannot operate any interactive games, and interactive gaming concessions are by law autonomous and separated from casino concessions.
No regulation on interactive gaming has been enacted, and public policy tends not to encourage this type of gaming.
These restrictions do not prevent Macau residents from registering on online gaming platforms or websites located overseas. To our knowledge, no plans exist to implement measures to curb residents' access to such platforms or websites.vi Ancillary matters
The Gaming Machines Regulation establishes the legal regime for the supply of gaming machines and the requisites for gaming machines, equipment and gaming systems.
Gaming machines, equipment and systems to be installed in Macau casinos are subject to a technical assessment by DICJ under the requirements established by the Regulation. In addition, several instructions with technical standards have been issued on EGMs, card shufflers and shoes, dealer-operated electronic table games (ETGs), jackpot and centralised monitoring systems, and ETGs.
The latest EGM technical standards (version 2.0) state:
A transition period of 16 months until December 31, 2022 is in place for authorised EGM manufacturers to adapt to and be fully compliant with the new rules and, starting on December 31, 2022 and until 31 December 2024, all casino concessionaires and sub-concessionaires must also submit a biannual report detailing their progress in decommissioning or converting outdated EGMs to fully compliant status with Standards 2.0. Any EGM which is non-compliant with Standards 2.0 by noon of December 21, 2024 must be switched off and withdrawn permanently from the operation. . . . One of the most notable material changes to the previous EGM technical standards is that Standards 2.0 now determine that coin input/output systems are prohibited from using in Macau gaming floors. Likewise, all references to coin-based hardware (i.e., coin validators, coin acceptor requirements and error conditions, diverter, coin hoppers, and error conditions, drop boxes, etc.) are removed from Standards 2.0, as coin acceptors and coin hoppers are no longer foreseen, and gaming software shall also be updated under these changes.4
The grace period was extended until 31 December 2026 pursuant to an instruction of DICJ of 29 December 2022.
Manufacturers of gaming machines, equipment and systems must be licensed, and suppliers must obtain authorisation from DICJ to conduct their business in Macau. Manufacturers and their qualified shareholders (holding 5 per cent or more of the share capital) and directors are subject to a suitability assessment process by DICJ. Manufacturers licensed in certain major gaming jurisdictions (Nevada, New Jersey, Mississippi, Australia, New Zealand, the United Kingdom and Singapore) may submit a formal request to waive this procedure.
Qualified shareholders (holding 5 per cent or more of the share capital) of the applicants to a casino concession and their respective directors and key employees shall be found suitable under a suitability assessment process. Casino concessionaires must remain suitable during the concession period.
Suitability requirements also apply to gaming promoters and management companies and their qualified shareholders (holding 5 per cent or more of the share capital), directors and key employees (those who perform the highest positions in the following areas):
- operation of games;
- human resources;
- legal; and
No legislation regarding financial payment mechanisms in the gaming sector has been enacted.
Moreover, local authorities have strongly and expressly discouraged the use of cryptocurrencies, particularly bitcoin.
There have been discussions on the possibility of the digital (Chinese) yuan being used in Macau casinos.5