Gov’t to assume full-time control over gaming tables number, firm on regulating ‘satellite casinos’

The government has firmly reaffirmed its intention to be able to reduce the number of gaming tables and slot machines available at local casinos at any point in time, representatives said yesterday during a meeting with the members of the Second Standing Committee of the Legislative Assembly.

The same representatives reaffirmed the intention of the government to enforce the regulations over the so-called “satellite casinos,” to ensure that they operate according to the laws concerning the ownership of the venues where they are installed and operating.

This was the third meeting between the committee members and representatives of the government to discuss the specialty of the provisions in the new gaming law before its final version goes to the plenary for final voting.

According to the president of the committee, lawmaker Chan Chak Mo, during yesterday’s two and a half-hour meeting the only item in discussion was Article 5 of the law that concerns the venues where gambling activities can take place.

Chan noted that while some voices among the lawmakers say that it would be best if the government amends this article, which allows casinos to operate in privately owned properties or buildings located on land plots with a commercial purpose other than gaming, the government does not agree in taking any step backward. He instead reaffirmed that all gaming operating venues must be under the direct ownership of the gaming concessionaires which operate them, and that in case of the revocation, cancelation, or expiration of the concession, these assets would revert to the Macau Special Administrative Region (MSAR).

According to Chan, the government only conceded in allowing a transition period of three years for the full enforcement of this rule with the purpose “of reducing the impact and the potential consequences of the forced closure of [satellite] casinos not operating in concessionaires venues.” 

He added that this transition period was chosen to allow enough time for owners to solve problems such as loans for the investment they might have contracted, as well as staff-related issues.

Avoiding the use of the term “satellite casino,” which the government claims had never been defined, Chan said that neither the government nor the committee has a clear figure for how many of these casinos exist and are currently in operation in Macau.

Chan said that initially, it was “suspected that they were around 20 but now we think some of them already closed so we think might be a little less, for sure not more than 22 or 23.”

Information aired in a previous meeting noted that there might be currently 18 satellite casinos operating in Macau, most of them (14) under a license from Sociedade de Jogos de Macau, three via a license from Galaxy Entertainment Group, and one with a license from Melco, a figure that the committee president refused to confirm.

Although there were several lawmakers who voiced opposition, Chan said the government is not going to give in and so, “if they disagree, all they can do is to vote against this article during the plenary [final] voting. Because even if the members do not agree they cannot force the government to change it. They can only vote against.”

Call for better use of allocated tables

Another of the topics over which the government wants to exercise absolute control is the allocation of gaming table resources.

Chan said he believes the concessions over the years might have been calling for more gaming tables than they needed.

The new law will give powers to the Chief Executive (CE), Ho Iat Seng, to define the maximum ceiling of the total number of gaming tables and slot machines to be authorized in Macau, while the Secretary for Economy and Finance, Lei Wai Nong, will have the power to reduce individual concession table numbers based on their usage as well as the revenue in gaming taxes coming from each table.

Questioned on the topic, Chan explained that the government has already established clear criteria that will play a role in the potential reduction on the number of gaming tables that includes factors such as global and local situation, economic performance, general conditions in society, as well as many other factors.

“Usage also can be taken into account to understand if the number [of tables] is enough or not. For example, if a concession has an allocation of 100 tables but in the end, the government sees those profits only coming from 50 of them, they can reduce accordingly,” Chan said.

Chan was less clear on the question of whether table allocation reduction from one concession could or could not revert in favor of a competitor, with Chan claiming that such a point has not been yet fully clarified.

Still, he thinks that the government would not wish to touch the number of tables “too often, as the government revenue comes directly from each one of them.” 

He explained that the government is establishing a minimum ceiling for the profitability of each table, making concessions pay the remaining amount if their tables are not profitable enough.

“In cases where gross gaming revenue does not reach a ceiling of earnings that will be defined by the CE, the concessionaire must pay for the difference,” Chan said, noting that the same applies when slot machines and gaming tables are not used “without justification.”

“I don’t think the CE will review the number of gaming tables and machines too often. Each of them has a 40% of profit sharing to the government’s purse so I don’t think there will be constant changes on this,” the president of the committee added, saying that the review “won’t be annual” as by law, the rule for rationalization of the gaming tables number will apply if the revenue does not reach the minimum ceiling for two consecutive years.

The next meetings for the committee to continue its detailed analysis of the gaming law are scheduled for this Thursday and Friday. Both meetings will include the presence of members of the government.

Gov’t unaware of employment consequences to reducing tables

Questioned by the media on the topic, the president of the Second Standing Committee of the AL, Chan Chak Mo, said that the government had not presented any figures or aired any potential concerns over a potential growth of the local unemployment rate concerning the reduction of the number of tables in the casinos.

In response to the question, Chan said, “We have not discussed that. We had no feedback from the government on such a topic. The government has said before that the problem of the employees of the casinos is an internal matter as they are employed by the concessionaire.”