Gaming | Casino entry levies: social responsibility or discrimination

Robert Cantwell (left), Óscar Madureira and Kahlil Philander

The so-called “casino entry levies,” that is, the fees or limitations enforced in some jurisdictions for patrons to access the casino floor, was one of the topics discussed yesterday during the last day of this year’s Global Gaming Expo (G2E) Asia event.

The historical background of such restrictions was analyzed by Robert Cantwell, partner at Lathrop Gage and expert on the US market, and Óscar Madureira, Lawyer at Rato, Ling, Lei & Cortes – Advogados (Lektou), who brought an Asian perspective to the discussion.

Although presenting different perspectives, both the panelists and the moderator, Kahlil Philander, assistant professor at the University of Washington, agreed about the fact that the enforcement of levies to access casino floors does not prevent people from accessing the casino to gamble.

Another of the aspects in which all the experts agreed is the fact that, as Madureira said, there is not enough data or relevant studies to support any of the existing theories around levies.

As Cantwell noted from his experiences in Missouri and Indiana, USA, “although there is a entry fee, it’s generally of USD2 or USD4 and patrons most of the time are not even aware of such a fee as casinos themselves manage that fee [including it in some service charge or others].”

He also mentioned that the idea behind such fee was “not to prevent local people from engaging in gaming but [to operate] as a kind of compensation to local communities to allow gaming activities in their area.” Cantwell explained that the money collected from the fee would be returned to several community projects, noting that, as such, it “did have some form of social aspect [attached].” Either way, eventually the fee system “faded into a membership system where you can be a member just for USD10 [that you can use] to buy something within the property.”

Madureira stated, “I’m not that confident that these kind of measures produce the effect they were designed to. From all who were [consulted] about this topic I can’t get a clear idea that this can prevent in any way or reduce people’s appetite to go to the casino.” He noted that arguments citing countries like Singapore, where the enforcement of entry fees upon locals are said to have the desired deterrent effect, may be biased, suggesting, “maybe they just got bored [of going there] as they have only two properties,” he said.

Madureira also noted that using such a system in Macau “would definitely not work” for “historical reasons and others that are related to the free flow of people around the properties, among others.”

Going a bit further, Madureira added, “this is not the most appropriate way to take care of the issues [involving responsible gaming].”

Deepening the discussion, Philander raised the question of whether levies are even ethical.

On that topic, Cantwell believed that “although it might not produce any consequence, the idea behind the creation of levies is an ethical one in the sense that it aims to give back to the communities and try to help in some way with the problems [eventually] created by gaming.” However, he agreed that levies, especially “high enough levies that can keep some people away,” might be discriminatory, by preventing access to gaming only for the less wealthy, while wealthier members of the public would not be deterred regardless of their “gaming behavior” or “susceptibility to addiction.”

On that topic, Madureira believes, “when the authorities put these measures into place, they were seeking to put some ethics into the system,” adding, “there is no commercial objective in this. There is no integrated resort in the world that can profit in any way from these [levies],” as although the amount can be large it is “irrelevant compared with the Gross Gaming Revenue that these properties are raising.”

Addressing the preventive measures taken by several jurisdictions to reduce problematic gambling, Madudeira noted the “good spirit” of the authorities when creating the measures, but also acknowledged that some measures were almost impossible to be fully enforced – in particular, the proposed casino entry ban or self-instigated ban to enter casinos. “Of course we receive all these lists and updates from the Gaming Inspection, and Coordination Bureau but it’s impossible [to guarantee] that all these people [are scrutinized] at the entrance. Sometimes we have 50,000 people entering the casino floor in one day so it’s impossible [to check them one-by-one].” Madudeira added that although facial recognition technology is playing an important role, it is still not fail-proof.

As for Cantwell, he noted the success of the gambling licensing system employed in the US and considered it a potential solution in the future for Macau. However, Madureira was of the view that each solution was unique to each jurisdiction and closely tied to the local culture, and as such, a different solution “should be adopted according to each culture and market.”

Industry is ‘world-class standard’ on anti-money laundering compliance

Tom Roche

A keynote speech and debate was held yesterday afternoon at the Venetian Cotai Expo, concluding the circle of forums and conferences held concurrently with the Global Gaming Expo (G2E) Asia event.

Tom Roche, partner & head of the Global Gaming Group, Ernst & Young Hong Kong said, “In my view, we are probably the world-class standard on anti-money laundering compliance,” adding that besides being a highly regulated activity, it has been always under close scrutiny from the media. Due to that, “Our industry has, over time, put a lot of resources and experts towards [developing] the compliance program of anti-money laundering.”

Roche noted that for the time being, Macau has adopted several measures to comply with the international rules received “a very positive review.”

Roche elected Singapore as the “highest level” in the field of compliance with anti-money laundering requirements, while noting other Asian jurisdictions that face challenges in the area of compliance. He mentioned Vietnam and Laos, which have made efforts to comply with the standards, and other cases such as Cambodia, where “there is still a long way to go.”

Another of the challenges presented to the industry according to Roche is the possibility of the introduction of cryptocurrencies, predicted to be a game changer in the process.

The gaming expert also noted that the “global characteristics” of the gaming industry are critical as well as its “reputation,” noting that “any scandal [occurring] anywhere in the world will impact all other jurisdictions.”

On the matter of good practices enforced within Macau, most recently, the “data accuracy of the KYC system” applied to ATM machines and the “Extensive Internal Audit Reviews” of the gaming concessionaires have been among the most highly praised. Roche concluded that the most important factor in compliance is the regular review of risk assessments, to ensure that the industry stays up to date.