What to expect from the Macau gaming market in 2021
Insight provided by Pedro Cortes, Managing Partner at Rato, Ling, Lei & Cortes - Advogados, and Antonio Lobo Viela, Advisor on gaming and gaming related matters
The covid-19 pandemic changed completely the fruitful Macau gaming market. The losses associated with the big decline in the number of visitors and consequently on GGR may change the pave of the industry.

The Macau’s government Policy Address for 2021, mentioned in the Economy and Finance field the following goals:
a)    stabilization of the economy;
b)    security of employment;
c)     maintenance of the living conditions of the population; 
d)    increasing domestic demand, and;
e)    integrating in the wide circle of the national economy. 

The principal actions proposed have the purpose of: safeguarding and stimulating the economy; reinforcing the diversification of the economy; intensifying the boosting effect of tourism; promoting use of cashless payment; and advancing work relating to the cooperation between Guangdong and Macau on Hengqin island. It was stated that the Macau government intends to ensure Macau ID card holders secure a minimum of 8 per cent of all leadership and managerial positions with the city’s gaming operators. 
It is understood by the Macau government that the structural weakness of the economy, excessively dependent as it is on tourism and gaming, became more well known as a result of the pandemic. It is now considered that the diversification of the economy is the only way forward[1]

It was recently announced by the Secretary for Economy and Finance plans for launching a public consultation on the amendment to the Macau Gaming Law during the second half of 2021, deemed as “very important as it relates to the well-being of the local population”. The opening of an international public tender continues scheduled for 2022 as the current concessions and sub-concessions are due to expire on June 26, 2022.

Earlier, during the Policy Address of late November 2020, the Secretary for Economy and Finance has mentioned (despite being an election year for the Legislative Assembly) that the proposed changes to the Macau Gaming Law could be submitted to the Legislative Assembly by the last quarter of 2021, which would push the launch of the tender launched for the first or second quarter of 2022, ahead of June 26, 2022. 

If the plan currently in place is not fulfilled – which, given several circumstances, seems likely to be the case, in line with previous comments on the subject[2] –, the Macau Chief Executive may extend all casino gaming concessions (and authorising the extension of all casino gaming sub-concessions), one or more times, up to five years (until June 26, 2027).

The revision of the regulations on gaming promoters[3] (namely on suitability and financial capacity requirements) and gaming machines (namely on the improvement of the licensing of gaming machines manufacturers), announced by the Macau government in the past and included in the Policy Address for 2021, might be finally considered. Administrative Regulation No. 26/2001 of 29 October 2001 (public tender regulation), which foresee the casino gaming concession awarding criteria is not within the list of laws and regulations to be amended[4].

Additionally, it is also expected that legislation long due on administrative offences in the gaming sector and on gaming chips be enacted. In fact, the Macau Gaming Law stipulates that the government shall enact complementary legislation covering, in particular, the public tender process, concession contracts, the use and frequency of casinos, the operation of the premises used for the exploitation of casino gaming concessions, the monitoring of gross gaming revenues, the casino gaming operators’ employees, the practice of casino games of chance and administrative infractions. As yet, only legislation on the public tender process and concession contracts (Administrative Regulation No. 26/2001), the frequency of casinos (Law No. 10/2012, as amended) and administrative infractions restricted to the piece of legislation where they are included (Administrative Regulation No. 6/2002 and Law No. 10/2012, as amended) has been enacted.

It is expected that social responsibility will be a topic of paramount importance in the public tender announced to 2022. Notwithstanding the Macau laws not foreseeing any at the moment, casino gaming operators have been putting in place mild measures in this regard, especially because Macau legislators from time to time voice such a need and the Macau government has been advising its implementation, particularly in relation to casino employees; the Chinese lotteries operator has a contractual obligation to deposit (in a bank account opened in its name specifically to the effect) the amount of all unclaimed premiums and donate them to charitable institutions chosen by the operator directly and accepted by the MSAR; the instant lotteries and sports betting operator has a contractual obligation to deposit 1 million patacas every year to a denominated health fund, created with an initial capital of 2.5 million patacas pursuant to a contractual obligation; SJM and MGM agreed, as consideration for the extension of the contractual term of their casino gaming contracts, to be included in the mandatory social security regime and to provide the Macau government with a bank guarantee to secure the payment of labour debts. Almost 2 years have passed and the Macau government has not imposed a similar obligation to the remaining casino gaming operators.
Moreover, it is yet to be considered whether the public policy will remain the same and whether the Macau government should contemplate not only the amount of premium or contributions to be paid, but also the following in terms of criteria to award the concession[5]:

  1. proposals for investment in the Greater Bay Area, vis-à-vis the creation of an international world-class tourism destination, recognizing the uniqueness of cultural and social resources of Macau;
  2. proposals for investments to create new tourism-source markets;
  3. contribution to the long-term welfare of the Macau residents;
  4. enhancement of innovation in gaming, and creation of an innovative-technology centre;
  5. contribution to public education policies and to attracting international talent, and;
  6. corporate and social responsibility plans.
As several times announced by the Macau government, interactive gaming seems to not be a topic on table for consideration any time soon, in part due to the sensitive political issues it raises.

[1] See Pedro Cortés. Macau Gaming Industry 8.0 - Public Policy Beyond 2022, Gaming Law Review. Mar 2021.50-65.http://doi.org/10.1089/glr2.2020.0029.

[2] See Veteran Macau Observers Back Concession Extensions, Seventh Concession, in Vixio, May 23, 2019 (https://vixio.com/insight/gamblingcompliance/veteran-macau-observers-back-concession-extensions-seventh-concession/).

[3] See António Lobo Vilela, The Liability of Macau Casino Operators for the Activity Rendered Inside Casinos by Gaming Promoters (Junkets) — An Update on the Current Litigation, Gaming Law Review. Mar 2021. 66-75. http://doi.org/10.1089/glr2.2020.0030.

[4] António Lobo Vilela, Current Casino Gaming Regulations in Macau, Gambling.re Magazine, February 2021, 21-22. (https://cdn.flipsnack.com/widget/v2/widget.html?hash=zt5oimmzhm)

[5] See footnote 1.