Inside Asian Gaming

INSIDE ASIAN GAMING | July 2010 24 Any violation of the legal provisions that regulate the junket activity will be taken into consideration in the assessment as to whether the junket is fit to carry out the activity. The junket activity itself Junket activity is regulated by Administrative Regulation no. 6/2002 and Law no. 5/2004 (the legal regime of concession of credit for gaming or betting), the Commercial Code of Macau and also by, Law no. 16/2001 (known popularly as the Gaming Law) and its complementary regulation. The junket activity is not by nature exercised exclusively for a specific casino operator unless otherwise contractually agreedwiththatoperator.Initiallythegaming concessionaires and sub concessionaires did request exclusivity. In order to better control junket activity, legislators have introduced the concept of joint liability. Article 29 of Administrative Regulation no. 6/2002 says casino operators are jointly liable for any infringement of regulations by the junkets and for the junket’s activity in casinos. In addition Article 30 states that gaming concessionaires and sub concessionaires must: • Submit to the DICJ, within a specific reporting timetable, a list of all payments of commissions or compensations, the withheld tax and all information needed to calculate such commissions; • Submit to the DICJ, every three months, a list of all the junket’s corporate bodies, their principal employees or collaborators; • Inform the DICJ of any fact that affects the solvency of the junket; • Keep updated the junket’s commercial bookkeeping; • Supervise the junket’s activity, especially the compliance with the applicable regulations; • Communicate to the relevant authorities any situation that might represent a criminal conduct by the junkets, namely money laundering; • Promptly pay the commissions and compensations due to the junkets. The gaming concessionaires and sub concessionaires are also required to assist the DICJ in its supervisory duties. Junkets must fulfill the following obligations: • Allow the DICJ’s supervision and inspection and provide it with any documentation and information requested; • Comply with all legislation and instructions given by the DICJ; • Allow any audits by the DICJ or the Finance Services Bureau; • Comply with all the contractual terms enteredwith the gaming concessionaires and sub concessionaires and their instructions, provided their autonomy is not impaired. The Chief Executive of the Macau SAR government, or under delegated authority, the Secretary of Economy and Finance, have the power to impose sanctions on rule breakers under Article 32-A and 32-B: • A fine ranging from MOP100,000 (US$12,470) to MOP500,000 (US$62,345) 4 , if a commission was paid in violation of the junket commission cap (applicable to junkets and casino operators alike) determined by the Secretary for Economy and Finance under the new Article 27 (introduced by Administrative Regulation no. 27/2009) 5 . • A fine ranging from MOP50,000 (US$6,235) to MOP250,000 (US$31,173), if the casino operator does not provide the DICJ with the lists of all payments of commissions or compensations, the withheld tax and all information needed to calculate such commissions; • Suspension of the junket’s licence for six months or revocation of the licence; • Publication of the decision on the DICJ’s website and in two daily newspapers for five consecutive days. Rule breakers will bear all costs of these announcements. When taking all of the above rules into consideration, and comparing Macau to other gaming jurisdictions where junkets exist, one can see that claims in the media and elsewhere that Macau has a lack of regulation or light touch regulation are largely exaggerated. Such claims derive mainly from the lack of knowledge of the provisions in place in Macau. Enforcement of the rules is a separate issue, which we will discuss in the second article. Bruno Nunes is a lawyer based in Macau with a practice focused on gaming, corporate and intellectual property law. Macau’s chief executive–power to impose fines 4 The fines were set at a maximum of MOP$500,000 since the government intended to have them approved by Administrative Regulation. Fines above that amount would require a separate law approved by the Legislative Assembly. 5 The commissions or any other type of retribution to the junket cannot be higher than 1,25 % of the total wager (net rolling) no matter what the basis for its calculation, as per No.1 of the Dispatch of the Secretary for Economy and Finance, no. 83/2009. Macau Policy