Inside Asian Gaming

INSIDE ASIAN GAMING | August 2010 32 fines, under Article 32-A and 32-B of Administrative Regulation no. 6/2002. Provision of gaming credit Provision of gaming credit is one of the key elements of the success in the Macau gaming industry. VIP high rollers account for approximately two thirds of the total volume of gaming revenues in Macau. Many of those high rollers are mainland Chinese and can only legally bring a maximum of RMB20,000 (US$2,950) across the border. The provision of legal gaming credit, especially through junket operators, provides alternative forms of funding. Gaming credit is regulated under Lawno. 5/2004, in force since 1st July 2004 as part of the territory’s Legal Regime of Provision of Credit for Games of Fortune and Chance. Article 2, No. 1 states gaming credit issuance occurs when a credit provider transmits to a third party the ownership of casino chips for games of fortune and chance without the immediate payment of money i . Under Article 3, only casino operators are legally authorised to provide gaming credit. It adds that junket operators can also be an authorised gaming credit provider if they enter into“credit provision agreements”with casino operators. The Law specifically forbids, in Article 5, the provision of credit through third parties (i.e. anyone other than the authorised casino operator or the authorised junket operator), and would nullify any such contract or act under Macau law. Article 3 No. 6 states only the following gaming credit relations may exist: - between a casino operator (provider) and a player; - between a junket operator (provider) and a player; or The carrot—junkets can be authorised credit providers in Macau The stick—every government department mobilised to root out loan sharking Loan sharks beware—an outsider’s view of Macau prison i No. 2 of Article 2 clarifies, in very broad terms, the understanding of “money” in this context, providing a long list of examples, which include: cash, travellers cheques, certified cheques, cashier’s orders or cashier’s checks, money orders, electronic fund transfers through electronic means of payment (credit or debit cards or prepaid cards). ii Legal interest is currently determined by Executive Order no. 29/2006. - between a casino operator (provider) and a junket operator. Credit provision agreements between a casino operator and a junket operator and any complementary documents or changes must be approved by the DICJ, in writing and with notarised signatures. A copy of the agreement must be submitted to the DICJ within 15 days of the agreement coming into effect (as per Article 8). Interest may be charged by the provider under the agreement if the debtor does not repay the credit within an agreed time. Article 1073 of the Civil Code determines that such interest cannot exceed three times the maximum annual percentage rate ii of 9.75%. Article 4 of Law No. 5/2004 makes it clear that the provision of properly authorised gaming credit creates a civil liability on the part of the borrower that can be pursued by the creditor through the Macau courts. Regulation