From left to right, Govinda Singh, Tim Shepherd, Rui Pinto Proença, David Rittvo and Martin Williams
Gaming authorities’ flexible supervision of the industry over the past decade has contributed to the region’s meteoric boom, according to two guest speakers at a panel discussion at last week’s Macau Gaming Show.
Since the MSAR’s first chief executive Edmund Ho opened the market to foreign operators in 2002, the gambling industry was riding high until early last year. Martin Williams, Asia Editor for the gaming intelligence provider, Gambling Compliance, reckoned that part of the credit went to the Gaming Inspection and Coordination Bureau (DICJ).
The Taipei-based journalist commented that the bureau “manages to do its work without excessive or obvious interference,” unlike its Singaporean counterpart Casino Regulatory Authority, known as CRA, which metes out heavy-handed punishment for industry irregularities. Local regulators adopt a comparatively soft approach in supervising the industry.
The session revolved around what other gaming jurisdictions could learn from Macau as a global gambling mecca, home to over 30 casinos of different scales. The gaming watchdog’s oversight was also deemed as a source of inspiration for other burgeoning gaming jurisdictions.
10 senior officials from the Vietnamese treasury visited the region last week, seeking advice from local authorities and gaming operators for the expansion of their fledgling gaming industry.
“What they should be doing is setting up a regulator that is sufficiently autonomous and independent so that they can also defend themselves from criticism,” said Williams. In his opinion, DICJ has been “free of open criticism within the territory.”
“The only real pressure that’s publically placed on Macau is occasionally by legislators like Mr Coutinho who will stand up for an aggrieved slot machine player who thinks he’s been ripped off by a machine for not being granted a jackpot.”
However, the watchdog’s supervision was immediately thrown under spotlight in September when the junket operator Dore fell victim to internal fraud by a former employee. During yesterday’s discussion, it was noted that gaming operations are often accompanied by shabby business arrangements such as collective financing from individuals. It was hinted that authorities have long swept underground deals under the rug.
“If the regulator decides to enforce the law entirely and actively, and it hasn’t really done that before, that would hurt the market,” Williams commented.
Rui Pinto Proença, who heads the Corporate and Gaming department at local legal firm MdME, echoed this view: “Whatever you do, you touch on the regulation. You will definitely affect the business. This has been working, so let’s not touch it because it’ll hurt it,” he said, in reference to the authorities’ approach towards the unauthorized operation.
The lawyer linked the decade-long economic prosperity to the DICJ’s lax supervision, proclaiming that “the territory would not have achieved what it did if the industry had been over-regulated.”
“It’s the ability to give certainty to investors, but at the same time allowing overseas regulators to be comfortable with the gaming jurisdiction,” he remarked, lauding the local watchdog for its flexible governance, which many third parties find reassuring.
Despite acknowledging that loopholes in obsolete laws should have been closed several years ago, Proença noted that there was sufficient justification: “The gaming industry runs at a fast pace, and it’s not easy for regulators and operators to keep up with all the developments at all times.”
With the law preventing them from conducting business on a proper corporate structure, junket operators have to resort to unauthorized financing despite the fact that they play an essential role in the local gaming sector, the lawyer pointed out.
“But you can do that by allowing them to access markets that are already provided,” he said. “I don’t think you should just make their life more difficult without allowing them to be run as proper corporate groups.”
Paulo Martins Chan, a former Assistant Prosecutor General at the MP, was recently appointed to the office of gaming regulator, with the aim of “optimizing and executing the regulations.”
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