3-year buffer period to start alongside new concessions

The government has changed its mind and will only start counting the three-year buffer period concerning “satellite casinos” from the time new concession contracts take effect.

The news was disclosed yesterday by lawmaker Chan Chak Mo, president of the Second Standing Committee of the parliament. The committee held a meeting to discuss its opinions on the Amendment Bill of the Gaming Law (the Bill) with government officials, such as Secretary for Economy and Finance Lei Wai Nong.

Not a formal legal concept, the colloquial term “satellite casino” refers to casinos that are not located in real properties owned by the casino operators or concessionaires permitted by law to run gambling business. Slot machine halls, such as Mocha, are not stipulated.

The draft law proposes that concessionaires acquire the ownerships of casino areas within a three-year buffer period. The government has said that it would clarify the areas of each casino. On one hand, this is done to identify how large areas concessionaires with “satellite casinos” need to acquire. On the other hand, it is to allow non-casino areas, such as shopping malls and restaurants, to continue operations.

The current proposal is that the buffer period will depend on the promulgation date of the future law. At the post-meeting press briefing, Chan made the disclosure on the change in the government’s position by saying that this proposed provision will be updated. The clock for the three-year period will only start ticking on the date when the new casino contracts take effect.

In other proposed provisions, Chan said, the way they were written was unclear. He said that the government had used the phrase “as soon as possible” in many of these draft provisions, such as Article 17, to determine concessionaires’ duty of notification. The provisions also come with penalties, such as fines ranging between MOP600,000 and MOP1.5 million.

Chan pointed out that the committee was not satisfied with these provisions, as they are not clearly written while they carry liabilities. Therefore, it was proposed that the government make changes to these provisions for refinement.

When questioned as to whether the government had hinted at its intention or not to extend the three-year buffer period, the committee president highlighted government officials as having “strong poker faces”: “I could not read what they were thinking,” said Chan.

According to Article 50 of the draft law, the government proposed that concessionaires unsuccessful in re-bidding for the license dissolve their companies. In previous meetings, the government has already agreed to reconsider this, because the scope of business has expanded significantly compared with 20 years ago.

With the change, companies will remain and operate non-gambling businesses, such as hotels and catering.

Meanwhile, should there be a dissolution, shareholders in possession of 5% or more of the stakes of the company in question will bear joint liability, in relation to casino chips. This proposed provision – Clause 3, Article 50 – is different from the stipulations in the Commercial Code, among other laws.

When questioned by the committee about the matter, government officials justified the proposal by highlighting the importance of the gambling industry to Macau and that of the public interest. That is why a specific law and stipulation are required, it was explained.

The statute of limitations of relevant liabilities is set to 15 years in the Civil Code. As to how shareholders are identified as liable, government officials plan to set to start limitation at the closure of contracts.

Officials also pledged to refine wording in the draft provisions to clarify this responsibility.

The parliamentary committee has finished its first phase of review on the draft law. The coming period will see the government considering the comments and suggestions made by the committee, before updating the Bill into a second draft for the committee’s further analysis.

The committee president estimated that the government may need three weeks to refine the draft and provide the committee with a second draft.

On the other hand, several entities, such as some existing casino operators and associations, have submitted their opinions to the parliament on the Bill. Chan was asked about the matter yesterday.

He said that there are many channels through which the public can express their opinions. The parliament will consider them and may present them at meetings.