Playing by the rules

A U.S. criminal conviction would affect the “suitability” of a Macau gaming operator. Duarte Chagas, a legal advisor to Macau’s Gaming Inspection and Coordination Bureau made that assertion during last month’s Asian Gaming and Hospitality Congress at Galaxy Macau.
Citing the slogan “What happens in Vegas stays in Vegas”, Mr Chagas said, “It’s time to rethink that.”
He noted that the gaming regulator here focuses only on the “suitability and financial capacity” of Macau licensees. “[But] if a licence holder’s director or shareholder is convicted [in the U.S.], that would have an impact on suitability. If there was a loss of licence, that would have a bigger impact.”
He added: “It would also affect the financial capacity of the licence. There are all kinds of implications for the contracts written in Macau.”
Wynn Resorts Ltd and Las Vegas Sands Corp, parent companies of local operators Wynn Macau Ltd and Sands China Ltd respectively, have reported they are under investigation for possible violations of American laws linked to their operations in Macau, including alleged offenses under the U.S. Foreign Corrupt Practices Act that bars payments to foreign government officials.
According to Mr Chagas, convictions in the U.S. would however not necessarily trigger immediate action in Macau. “It would not be automatic. We would have to look at the circumstances of every case.”
Mr Chagas spoke as part of a panel on casino industry regulatory issues in Macau, including smoking restrictions due to take effect next month, age restrictions and exclusion rules, plus gaming licence expiration. Jorge Godinho of the University of Macau Faculty of Law, and Su Guojing, chairman of non-profit organisation Asian Responsible Gaming Alliance, also participated in the panel.

Diversification driver
Beijing may demand greater steps toward economic diversification to lessen Macau’s reliance on gaming in the next round of casino licences, expected when the current gaming concessions expire in 2020 and 2022, panellists noted.
“The central government has always been concerned about diversification of Macau’s economy,” Mr Su said, noting that he was expressing a personal opinion. “I’m pretty certain that the [new] leadership is going to insist on the diversification path.”
“Diversification could be included in new licensing requirements,” Mr Godinho agreed. “In 2002, there was no requirement to diversify. Singapore learned from our experience.”
When the Lion City tendered its casino licences, it insisted on so-called integrated resorts with strict limits on casino size and requirements on non-gaming elements. But Mr Godinho doesn’t expect Macau to be so stringent.
Recent land grants and construction approvals for current gaming concessionaires should meanwhile not be viewed as an indication that renewal of their licences is imminent, Mr Godinho cautioned. “We don’t know. The signs that have been coming out are that no earthquake will happen. But it’s a political decision.”

Look back, see ahead
Rather than trying to read tea leaves or current events, Mr Godinho suggested looking to the past. “History shows that concessions wind up getting renewed,” he said.
Tai Heng Company, holder of the first gaming monopoly for 25 years, originally received a two-year licence, he recounted. Similarly, Stanley Ho Hung Sun’s Sociedade de Turismo e Diversões de Macau SARL initially received an eight-year concession that ultimately lasted for 40 years.
“Macau has had long periods of stability [of gaming licences] with moments of rapid change,” Mr Godinho concluded, adding however “ground-shaking movements do occur.”
A big change is due on January 1, when casinos will have to designate at least 50 percent of their space as non-smoking areas.
“The industry has reacted in a very strong way to the restriction,” Mr Chagas said. “We have to have good sense here and the Health Bureau [which will implement the regulations] has to have good sense.”
Casinos have great leeway in deciding where to place the non-smoking areas. “The Macau market has particular characteristics. For example, smoking can be allocated to the VIP rooms,” Mr Chagas pointed out. “In some casinos, where the mass market is more important, there can be more allocation of smoking in those areas.”

Time of the signs?
The law raising the minimum casino admission and employment age from 18 to 21 has drawn a great deal of attention in the mainland as well as Macau, according to Mr Su. He questioned enforcement of the law, enacted last month.
“In Singapore, you have to show your passport or ID to get into the casino. Here, you’re still not checked.”
Signage about the new minimum age is “hard to find and small” and often away from the casino, Mr Su added. “We’d like to see more obvious signs at the casino entrances.”
The new law doesn’t specify the standards for size and placement of signs, Mr Godinho said. He added that while the change in the casino admission age has been widely publicised in Macau, most of the casino visitors are from outside the city and so may not be aware of the change.
The same law allows individuals to request exclusion from casinos. Violating an exclusion order is a criminal offense, subject to imprisonment or a fine, Mr Chagas explained. The rules also enable families to request exclusion for a family member, subject to the approval of the excluded person.
“Self-exclusion and family exclusion has been very common for many years in the U.S. and elsewhere,” Mr Su said. “Macau may be a little behind, but it’s trying to catch up.”
He suggested that “direct relations” such as parents, children or spouses should be able to file an exclusion application without the approval of the person to be excluded. Macau should also consider requiring casino marketing material to include information on how to apply for exclusion.
Mr Godinho took issue with the criminalisation of exclusion violations. “If a person realises he has a problem and takes the responsible action of excluding himself, then loses control, this person has a legal problem,” he said. “It could result in a prison term, it could give him a criminal record. It gives the person an even bigger problem.”