Gaming | China’s new crime amendment could cripple Macau’s 2021 VIP sector: experts

The Standing Committee of the National People’s Congress (NPC), China’s top legislature, has sanctioned an amendment to the national criminal law criminalizing anyone who “organizes [for] citizens of Mainland China to participate in gambling outside the country (or border), which involves a hefty sum or cases with serious consequences.” The amended law will come into force on March 1, 2021.
The new law foreshadows that anyone who “organizes” gambling trips or activities for mainland citizens to Macau will be considered to be breaking the law. It stipulates that a person who commits the gambling offence will be subject to imprisonment of at least five years and up to 10 years.
Wang Changbin, director of the Center for Gaming and Tourism Studies at the Macao Polytechnic Institute, told the Times that the new law, by literal interpretation, could cover all places outside mainland China, including Hong Kong, Macau, Taiwan, and all other countries.
Ben Lee, a Macau-based gaming expert and managing partner of IGamiX Management & Consulting, told the Times that the amendment — which is even “stricter” than the existing law — means that China is taking “one step further” to crack down on gambling, which may or may not include Macau.
Regarding the existing criminal law, a move to organize more than ten mainland citizens to gamble overseas will be considered illegal. However, the latest change extends its scope regardless of the number of the mainland residents involved.
According to the official document, the latest amendment was made after a careful study by the committee and is intended to further crack down on overseas gambling crimes.
Nonetheless, the document does not specify the definition of a “hefty sum” as well as “cases with serious consequences.”
“Obviously, the city’s VIP sector and also premium mass will be severely depressed,” Lee observed. Junkets are businesses that act as middlemen for high rollers from China. Wang echoed Lee’s remark, saying that “most bets at VIP tables could be easily deemed ‘hefty.’”
Lee believes that the government’s target to secure an annual gross gaming revenue (GGR) of MOP130 billion for 2021, equivalent to 44.5% of 2019’s figure, will likely not be reached, once the new law comes into force.
The new law arguably acts as a deterrent to not only high-rollers, but also regular gamblers to Macau from China, who are under a greater degree of surveillance from the Chinese government, Lee believes.
Lee also expects the adverse impact of the new law will not affect only casino operators, it will permeate across sectors, with a lot of local SMEs being similarly affected in 2021.
“We have to wait and see how they [the Chinese government] apply the law and what the threshold is,” he stressed, saying it is pointless to interpret the latest law when the details haven’t been spelled out yet.
Considering the VIP sector has often accounted for the biggest share of the total GGR, Wang also said the new law could have a detrimental impact on Macau’s overall economy.
During the pandemic, official data shows that Macau registered a total of MOP6.74 billion in gross gaming revenue in November, down 70.5% year-on-year.
In the third quarter (Q3) of 2020, VIP baccarat received MOP2.34 billion, accounting for around 48% of the total GGR made from Games of Fortune across the quarter.
The latest amendment to the national criminal law has also heightened the penalties for setting up a casino in China. The new amendment stipulates that any person who opens a casino in mainland China will be fined and sentenced to imprisonment of up to five years. For other cases with “serious consequences,” those responsible will be fined and put behind bars for five to 10 years.
The change to Article 303 of the Criminal Law was officially endorsed by the Standing Committee on December 26. The official document detailing the changes was published on the official website and by the state media Xinhua news agency. Staff reporter