Chinese Government To Impose New & Strict Rules For Macau Casinos

The Chinese government is planning to impose stricter regulations on Macau casinos to ensure a regulatory overhaul  of the world’s  largest gambling market. Macau’s secretary for economy and finance Lei Wai Nong wants to change the regulatory process for casinos in the former Portuguese colony and has announced a 45-day consultation period to implement new rules for casinos. The move comes as operators are starting the rebidding process on their licenses expiring in June 2022.

According to Lei, there will be a minimum nine areas of the casino market with new and strict rules, including the possibility of changing the number of licenses available. Lei said that an increase in licensees would result in an “unhealthy competition” to the space and therefore the government is planning to reduce the number of casino licenses available, following new proposals for the casinos.

The new proposals also include the length of the license’s validity, more employee protection and safety measures, strengthened verification for junket operators, reinforcing official requirements for operators, promoting projects with non-gaming elements, adding a social responsibility, clarifying the criminal liabilities, and having government agents in place to monitor daily operations.

Post the new proposals, stock prices of gambling companies with Macau properties dropped. Wynn Macau fell 34%, with Sands China dropping 28%, Galaxy Entertainment, Melco Entertainment and SJM all witnessing losses for their investors. “Margins will be crushed at the gambling capital of the world and that will drag down all the big casinos,” said Edward Moya, senior market analyst at OANDA.

Chinese regulations surrounding the COVID-19 resulted in a sharp decline in August’s gross gambling revenue. While these new proposals shouldn’t affect Macau’s gross gambling revenue, it could greatly impact investment in the space, which in turn may change the customer’s experience.