Inside Asian Gaming

INSIDE ASIAN GAMING | August 2010 30 Regulation I n July, we looked at the rules governing Macau junket operations. This month, we consider how junket regulation meshes with other aspects of Macau gaming law and how the whole system is enforced. Two gaming regulations have an impact specifically on the commercial incentives that drive the gambling agent system in the VIP rooms of Macau casinos. They relate to the commission cap and the provision of gambling credit by the gaming operators in Macau. Commission cap As mentioned in our previous article, Administrative Regulation No. 6/2002, amended by Administrative Regulation No. 27/2009, is the main legal document regulating junket activity. The latter regulation, published on 10th August 2009, is the one the Macau government relies upon for enforcement of themuch discussed commission cap. The cap was achieved by amending an article in another Administrative Regulation—No. 6/2002. This confirms that Macau’s Secretary for Economy and Finance has the power to establish, by legal dispatch, a maximum cap on the commissions and other types of payments that can be made to junkets by the casino operators. The second part of the same provision goes on to clarify that any bonuses, gratuities, services or other pecuniary advantages that can be subject to pecuniary determination, will be considered as retribution. The cap, while in force, applies whether such payments are made in Macau or abroad. It also applies to the following: payments made directly; payments made through a company in which the concessionaire has a stake; and payments to any company with which the concession itself has a relationship. The commission cap was determined by the Dispatch of the Secretary for Economy and Finance No. 83/2009, which came into effect on 22nd September 2009. Article 1 says commissions or any other type of compensation to a junket cannot be higher than 1.25% of the total wager (net rolling), regardless of the basis used for its calculation. By making the legal provisions so broad when defining junket commission or compensation, it seems the Government has taken into consideration the highly imaginative forms of payment and perks that were being granted to and from some junkets following the establishment of the junket regulatory framework in 2002. As a further safeguard, casino operators must file with the Gaming Inspection and Coordination Bureau (DICJ) a copy of any agreements entered into with the junket operators. The casinos must also submit any complementary agreements or other documents involving obligations or payments equal to or higher than one million patacas (US$120,000). In an attempt to ensure the enforcement of the commission cap, the Government went ahead with a minor change on one of the duties of the casino operators set forth in Article 30, Paragraph 1 of Administrative Regulation no. 6/2002. This change imposes an active responsibility on the casino operators to submit all the information needed for the DICJ to verify calculation of junket incentive payments. As stated in the previous article, infringement of these limits or reporting obligations can lead to sanctions, including Carrots and Sticks Lawyer Bruno Nunes on Macau’s efforts to regulate its long standing tradition of gambling credit Back door closed—no way round the commission cap?