1. Licensing Gaming Industry in Macao: Overview and Improvement
WANG Changbin, Professor
Gaming Teaching & Research Center
Macao Polytechnic Institute
Sept. 12, 2018 Malta

2. Overview of Licenses for the Gaming Industry in Macao
Licenses for entities and licenses for individuals
Licenses for entities
casino operators
gaming promoters
gaming machine suppliers
License for individuals
shareholders with 5% of corporate capital or above
directors
key employees

3. Licensing Casino Operators
The maximum number of licenses for casino operators is three according to the law
In practice six casino operators in Macao, in which three are so-called concessionaires, the other three are sub-concessionaires which obtain their licenses through the three original ones
40 casinos by 2017

4. Casino Operators Acquire License through Public Bidding
Must have the minimum capital of MOP 200 million (around USD 25 million)
Must be a public corporation registered in Macao
The shareholders with 5% or above of the corporate capital, directors and key employees must be suitable
The critical factors that the government considers whether or not to grant a license are
experience in gaming industry;
reputation;
financial resources;
potential benefit to Macao.

5. The Length of Concession
Not more than 20 years according to the law
In practice, one concessionaire and its sub-concessionaire were granted 18 years, the others 20 years
The earliest expiration year is 2020
The length of concession can be extended once or multiple times under special situation, but cannot be more than five years altogether
After the expiration, a new round of public bidding would take place

6. The Role of Gaming Promoters (VIP Rooms) in Macao
In Macao, the gaming promoters run most of the VIP rooms.
The revenue from VIP rooms accounts for 65-70% of the total gaming revenue from 2002 to 2013
55% in 2017

7. Macao Gross Gaming Revenue (Million US Dollars)

8. Gross Gaming Revenue From Casinos (Million US Dollars)

9. Proportion in Total Gross Gaming Revenue

10. License gaming promoters as an Intermediary
A Commercial Entrepreneur in accordance with the Commercial Code
A company, can be either limited or unlimited liability; or
A natural person
The minimum capital requirements for a Commercial Entrepreneur
No capital requirements for a natural person, unlimited company and limited partnership
For a private limited company, MOP25,000 (ca. $3,000)
For a public limited company, MOP1 million (ca. $125,000)
In practice, security deposit of MOP 100,000 (ca. $12,500 ) be submitted to the regulator

11. Licensing Gaming Promoters As An Intermediary
The capital requirement is not much
No limit for the number of gaming promoters, thus no need of public bidding
Either individual or company can be a gaming promoter

12. Gaming Promoters Need to Be Licensed As A Gaming Operator
Gaming promoters in Macao are different from other jurisdictions
Gaming promoters run VIP rooms in Macao. It is actually a partner of the casino operators.
Two types of VIP rooms: revenue sharing and commission
Revenue sharing: 60% to casino operators
Commission: must meet the minimum amount of turnover
Credit betting increases the business risk

13. Licensing Gaming Promoters As An Casino Operator
The VIP rooms need abundant capital and stable cash flow
Capital increase is being discussed in Macao
To impose higher minimum amount of capital
To increase the amount of security deposit from MOP100,000 to 10 million

14. Licensing Gaming Machine Suppliers
A public corporation focus on gaming machine production or maintenance
Experience in producing or maintaining gaming machines
Reputation of the producer and the products
The shareholders with 5% or above of the corporate capital must be suitable
No minimum capital required
No limit for the number of gaming promoters, thus no need of public bidding

15. Licensing Gaming Machines
Meet the requirements of Macao’s Gaming Machine Technical Standards
Meet the basic requirements about gaming machines
Sturdy construction;
Clear label with the basic information on the producer and the machine;
A technical manual;
The programming or the games must be lawful.
Provide a name list of the engineers with the required information
Provide a certificate issued by a research institute which has been acknowledged by Macao government

16. Licensing Individuals
Individuals who need to go through suitability check
Shareholders with 5% or above of the corporate capital;
Directors;
Key employees
Only employees of high rank such as CEO, CFO etc., need to be licensed

17. Problems
A bunch of people in casinos and VIP rooms are not regulated, such as
middle managers
the customer representatives in VIP rooms
No clear and specific standards to measure whether or not the individuals are suitable
No substantial investigation has been made

18. The Licensing System Needs to be Improved
The licensing system in Macao is still quite new
A few suggests to improve the system
Expand the scope of the individuals who need to go through suitability check
Carry out serious investigations
Establish a team with knowledge and skills of investigation

19. WANG Changbin cbwang@ipm.edu.mo
Thank You!
WANG Changbin