Legal for anyone, everywhere, and heavily taxed.
The Macao Special Administrative Region of the People’s Republic of China, or Macau, is an autonomous territory situated on the western side of the Pearl River estuary to the South China Sea consisting of the Macau Peninsula and the islands of Taipa and Coloane.
Located 37 mi southwest of Hong Kong and populated with 638,000 in 2018, Macau is free economic zone and an offshore financial center considered a tax haven. The economy is largely based on tourism, export-geared textile manufacturing, banking, performance industry, and — gambling.
Present in China for millennia, gaming is embedded in the history of Macau since Portuguese colonial days. Legal as of 1849, the pastime metamorphosed through two monopolies in the 20th century and transfer of sovereignty to China in 1999, into the single most lucrative region’s industry that surpassed Las Vegas’ gambling revenues threefold in 2017.
In the process, it dubbed Macau the gambling capital of the world.
Overview
Gambling is legal for all residents and non-residents both in land-based and online casinos. All games of skill and luck (casinos, sports betting, horse and greyhound racing, lotteries, electronic gaming) are regulated by the following legislation:
- The Macau Gaming Law (Law 16/2001), the main legislation that sets out the legal framework for commercial operations of gambling products;
- Illegal Gambling Law (Law 8/96/M), which covers the unlicensed games;
- International Gaming Tender Regulation (Regulation 26/2001), which sets out the rules for the international public tender procedures;
- Gaming Credit Law (Law 5/2004), regulating the granting of gaming credits;
- Gaming Promoters’ Regulation (Regulation 6/2002), governing the market of gaming promoters;
- Electronic Gaming Machines Regulation (Regulation 16/2012), which regulates EGMs and systems as well as licensing procedures for EGM suppliers;
- Gaming Participation Law (Law 10/2012), standardizing gaming participation and the right to enter casinos;
- The Advertising Law (Law 7/89/M), which governs marketing activities related to gambling.
The Macau Chief Executive is the government authority ultimately responsible for determining the gambling policies, licensing, and regulation of gambling activities. In doing so, it is advised and assisted by Gaming Inspection and Coordination Bureau (DICJ; Direcção de Inspecção e Coordenação de Jogos), the regulatory body responsible for implementation of the gambling policies, licensing of operators, concessions agreements, monitoring of technical standards, and overseeing the activities of all parties. The operational framework and by-laws of DICJ are governed by the Regulation 34/2003.
Gambling taxes in Macau are 39% while residents and non-residents benefit from low single digit taxes levied against professional and business income.
Licensing
The commercial operations of all gambling areas are statutorily reserved to the Macau Government. When a private entity wants to enter the market it has to be done through a concession contract with the government. This is the fundamental element of the legal framework in Macau that applies both to land-based and online casinos.
The licensing process for the brick and mortar halls has been defined by the tender in 2001, which issued detailed instructions on operations, granting current concessions for the period of 20 years.
The licensing process of online casinos, on the other hand, is done without the tender. Licenses are issued on the individual basis once the concession has been approved. Licensing of online gambling software to Macau gaming operators also requires approval from DICJ.
Land-based casinos cannot have iGaming licenses.
Without a tender, the statutory requirements imposed on online gambling operators are not applicable at the moment.
Macau does not restrict access to overseas gaming nor does it impose blocking operations on the internet service providers.
Players Protection
Approximately 70% of gaming revenues in Macau is generated by high-rollers coming to the region from China and all over the world.
In fact, the gaming tourism, a peculiar business portmanteau, is so developed that it represents significant local economy contributor best epitomized in junkets — game promoters for VIP gambling patrons — separately governed by Gaming Promoters’ Regulation we already mentioned. (DICJ recently announced the short-term revision of junkets’ licensing rules in order to improve the sustainability of their operations.)
With such high levels of gambling operations, Macau executes a specific set of responsible gambling requirements that are not quite on par with developed gaming markets, though they did result with progress in the last ten years.
The Advertising Law prohibits any type of online or offline marketing activity that depicts games of chance or they play as the key communication element. (It appears that this does not cover sports betting, horse and greyhound races, and lotteries.)
Entrance in casinos is restricted to persons who are 21 years or older. The enactment of the Gaming Participation Law has allowed for the implementation of procedures for self-exclusion and exclusion by the third party.
Casinos are also required to set up adequate procedures in order to ensure the compliance.
Following initiatives like annual “Responsible Gambling Awareness Week”, the gambling disorders have declined to 2.5 percent in 2016, according to the Institute for the Study of Commercial Gaming at the University of Macau.
With casino concessions to start expiring in 2020, it might be safe to assume that the new tender will provide with the opportunity to fine tune all the necessary details in regulations of Macau’s thriving gambling market.
Further Reading
Nearby Restrictions
China
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Taiwan
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