Following an 8-week long break for the summer, lawmakers in China’s Special Administrative Region (SAR) have rubberstamped a new bill to tackle illegal gambling. Join us as we dissect the regulation and what experts are saying about its particulars.
After a two-month summer break, the Macau Legislative Assembly has returned with a bang, voting unanimously on a new bill, designed to clamp down on illegal gaming operations. All 32 lawmakers present voted in favor of the regulations contained in a bill tabled by the Chinese Special Administrative Region (SAR) authorities back in February. With the rules in place, the Macau gambling industry is slated for stricter penalties in case of non-compliance.
Gambling laws in the SAR have remained unchanged for most of the 20 years they have been in place, and the recently approved legislation marks a new chapter where authorities embrace an evolving gaming industry. For proponents of the revisions made in clarifying what defines criminal offenses and a push for legal accountability, the law, named ‘Law to Combat Crimes of Illegal Gambling,’ is a massive step in the right direction.
An overhaul of Macau’s has been in the works for some time now, and the past couple of years alone have seen the region make some significant revisions to policies and regulations in the gambling sector. Despite being the only place where gambling can legally take place on Chinese land, the strict rules that govern the mainland have always applied.
Moreover, the government constantly monitors gaming markets and the SAR’s implementation of gambling rules. The law now grants more jurisdictional powers to security authorities in investigation processes. For instance, criminal investigators now have permission to conduct nighttime searches on residential properties in cases relating to serious gambling crimes.
Communication restrictions will apply to all detainees, permitting them to only reach out to their counsel. To further intensify the crackdown, a key provision included in the law is the introduction of undercover agents who will be under the government’s protection. This will incentivize informants to cooperate with authorities whenever illegal gambling activities are witnessed.
One of the main activities that will see officials in illegal gaming companies face jail terms between one and eight years is unlicensed currency exchange services on casino platforms/premises. This is up from a previous maximum sentence of three years. Fortunately for customers, there will be no consequences for those who seek these services, legal or otherwise. That’s because the law states that engaging currency exchange providers does not signify intentions to exploit the systems and defraud the government.
Illegal currency exchanges have been linked to an increase in gaming-related crimes, which were reported to be up 62% in January 2024. This is a remarkable spike in comparison with the general crime rate, which was up by 18%. According to the government, currency gangs are responsible for kidnappings and even murders around the region. Running an illegal foreign currency exchange could lead to a 5-year jail sentence and a 10-year ban from any casinos in the SAR.
Casino entry bans will also apply to other crimes, including illegal money-lending operations for gambling purposes, illegally offering games of fortune to players, and counterfeited gaming chips. Indeed, money exchange has always been a point of contention on gambling premises. This is because the number of legal entities providing the services is not enough to sufficiently cater to the masses flocking to casino venues.
To some experts, banning illegal exchanges will create a deficit in the market and is unlikely to completely drive away the operators of such businesses. On the contrary, they could simply improvise and move their services elsewhere within Macau, yet again escaping the government’s radar. Former Macau government gambling adviser António Lobo Vilela has since voiced his opinion on the prohibition of money exchanges, terming them as the prime unofficial channels for supplying money to gamblers in Macau. These unofficial channels act as an engine for moving funds within the SAR without the need to cross borders.
António added that the business may end up being reduced to a ‘cash courier’ endeavor, where the exchange of funds is conducted outside Macau, and the SAR is where the monies are made available. He had told reporters in August after noting that the businesses could mushroom elsewhere, in some other kind of set-up – independent of casino environments. This is because only money exchanges operating inside casinos are targeted, as they are presumed to be primarily targeting gamblers.
Vilela’s views were echoed by legislator José Pereira Coutinho during the plenary session, who reiterated that while criminalization of the money exchanges will successfully push them out of casino premises, complete elimination is near impossible. Instead, he warned that these exchanges could opt to relocate to new venues and carry on availing their services to casino-goers. He highlighted that the authorized exchanges were not only limited in number but the exchange rates much higher in the legal foreign money exchange shops, further pushing casino patrons to seek underground alternatives.
Accessory penalties have also been raised to a jail term of up to three years. The SAR will now also call to book any corporate entities that are found culpable of facilitating illegal gambling in any form. Prison sentences for unlawful gambling loans have also been increased from three to five-year jail terms.
A call to clearly define certain terms about gambling crimes has received a response in the new law where ‘side bets’ and ‘parallel betting’ are classified as illegal gambling activities subject to penalties. Commercial exploitation of lotteries has also been included as a punishable offense with up to two years behind bars. Mark 6 lottery tickets were among those criminalized.
As the world’s richest and most profitable gambling hub, making it to the top and staying there has been no easy feat. Considerable efforts have been made to get the Macau SAR to its position and keep it at the top.
For one, the government has always been quick to act on concerns raised around illegal gambling activities despite the region undergoing relatively few major changes in its gambling legal framework. What sets Macau apart is its administration’s willingness to take decisive actions by adopting rigorous enforcement strategies to deter offenders. The recent update to gambling regulations is just one example of Macau’s resilience in safeguarding the integrity and sustainability of the industry.
In the past three years, Macau has carried out an aggressive clampdown on the once-thriving junket business by hitting several businesses with penalties and finally shrinking the industry to only allow a maximum of 50 licensed junkets beginning in 2025. This was followed by amendments to gambling laws to address credit activities within casinos, whose implementation kicked off in August 2024.
Achieving a crime-free gambling space where all profits are directed to the right pockets may be difficult, but Macau’s relentless zeal may be all it takes to guarantee some results.
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