With the New Law, National Security Takes Centre Stage

Macau Business | January 2024 | Special Report | New gaming concessions – The first year (and beyond)

MACAU, SAR (January 21, 2024) — In March 2022, then Chinese Vice Premier Han Zheng, when meeting with a delegation of Macau representatives to the Chinese People’s Political Consultative Conference, expressed three hopes for the SAR, among which was assisting the Government in the amendment work of the city’s gaming law. The Vice-Premier could not have been more explicit in wishing that the local Government would do “a good job in amending the gaming law.”

It was one of the first times that a top leader in Beijing referred to the issue of gambling so explicitly. It will be said that other leaders, starting with President Xi Jinping, had already mentioned the issue beforehand, but just pay attention to what Xi said in 2014 (“it is necessary to better regulate the gaming industry” [with] “courage and wisdom”) to understand the differences.

The truth is that, as the well-known political scientist Sonny Lo says, the PRC had been preparing the way for a new gaming law and the holding of the international tender at the end of 2022: “The so-called new contract stemmed from an understanding between the central government in Beijing and Macau, with Beijing believing that before the casino franchises were renewed Macau must do several things,” says Sonny Lo to Macau Business.

Among the topics worth highlighting are: “cleaning up the entire casino sector; punishing those casino capitalists who crossed the border and committed cross-border crime as it is illegal to gamble in mainland China including marketing activities and online gaming or regulating the role and financial background of intermediaries or junkets in the casino industry.”

Lo also highlights, considering the most important point, “diversifying the economy into new sectors without explicit heavy dependence and sole reliance on casino-driven capitalism, with the building up of Hengqin-Macau cooperation zone as a way out of the impasse.”

In other words, the law in force (“Amendment to the Gaming Law, 7/2022”) and the subsequent international tender were tailored to China’s requirements. That’s why Nelson Rose, a US-based leading gaming law expert, and with in-depth knowledge of Macau, states that “the influence of the PRC was not hidden.”

The legal consultant and expert witness understands the fact “the new first policy goal listed is the safeguard of national security and the security of the Macau SAR. Legal gambling has never before been singled out as a threat to national security. But ‘national security’ gives the government unlimited power. So, if Macau’s Chief Executive decides to terminate a casino concession, he is no longer bound by the criminal laws.”

Therefore, Rose understands, “It is difficult to see how the current VIP suites can continue. Junkets are being stifled. Even promoting overseas gaming is now a crime on the mainland.”

Also in Macau, the fact that the law in force has the main focus on national security led the local law firm MdME to comment: “The first policy goal listed in the Amendment to the Gaming Law is the safeguard of national security and the security of the Macau SAR. It prescribes that the operation of casino gaming may only take place on the assumption that national security is preserved. The most significant consequence of this policy materializes in the ability of the EC to terminate a concession contract on grounds of a threat to national security,” the legal review reads.

In the eyes of Sonny Lo, “Beijing tolerates Macau casino capitalism to persist, but the conditions were laid out very clearly just a year before the renewal of all casino franchises.”

“At the same time, Beijing also monitors who in the mainland often gamble in Macau casinos as some mainlanders have been seen as siphoning mainland treasuries and monies out of the mainland to Macau. As such, mainland authorities see Macau casinos as having potential and hidden threats to mainland economic security,” continues the political analyst in his conversation with Macau Business.

“This was also why Beijing encourages and requires Macau to diversify its economy ‘suitably,’ a code word referring to the tolerance of casino capitalism in Macau with whatever degree of economic diversification it can and will achieve,” concludes Sonny Lo.

SOURCE: Macau News Agency.