Macau Introduces Tougher Penalties for Illegal Gambling Under New Law

The Macau Special Administrative Region (SAR) of China has ramped up measures to combat illegal gambling in the region’s prominent casino industry.

Earlier this month, lawmakers in the Macau Legislative Assembly approved the Law to Combat Crimes of Illegal Gambling, which was subsequently signed by Assembly President Kou Hoi In and Chief Executive Ho Iat Seng. This new legislation officially became law on October 29.

The legislation specifically prohibits online gambling within the SAR and enforces stricter penalties on those involved in illegal gambling operations. Individuals found guilty of participating in illegal gambling can face up to six months in prison, while those operating such unlawful gambling activities now risk sentences of up to eight years. In addition, the law prohibits providing loans to gamblers in exchange for a share of any potential winnings, with violators facing up to five years in prison. The new regulation also forbids residents of Macau from participating in the Hong Kong Lottery and its widely popular Mark Six game.

Focus on Currency Exchanges and “Under-the-Table” Betting

One of the law’s most significant provisions includes the criminalization of “under-the-table” betting and unlicensed currency exchanges. “Under-the-table” bets involve high-stakes players placing large wagers against an external “house,” usually managed by a junket, that multiply the stakes beyond what’s visible on the table. Between 2013 and 2021, such bets are believed to have cost the Macau government over $1 billion in lost revenue, prompting a more significant crackdown on junket operators in recent years.

Of particular consequence to Macau’s six licensed casinos is the government’s crackdown on illegal money exchange networks. For years, wealthy mainland Chinese visitors, restricted by law from bringing more than $5,000 in cash into Macau, have used underground exchange networks. These networks allow gamblers to send money electronically to agents in Macau, who then provide cash—after deducting a substantial fee—upon their arrival.

The statute specifies, “Anyone who, without being legally authorized, exploits the currency exchange business for gambling purposes shall be punished with a prison sentence of up to five years.” In line with this directive, Macau’s Judiciary Police have intensified their focus on financial activities within the region. Just last week, 42 mainland residents suspected of involvement in unlicensed currency exchanges were transferred to Chinese law enforcement.

A Shift Toward Mass Market Amid Regulatory Changes

As the Chinese and Macau governments clamp down on high-stakes gambling and the transfer of significant cash sums from mainland China, Macau’s multimillion-dollar casino resorts are shifting their focus to mass-market and premium-mass gambling sectors. These casinos are investing in non-gaming amenities to maintain high occupancy rates in their thousands of hotel rooms and drive foot traffic to other resort offerings. By the end of the third quarter of 2024, Macau’s gross gaming revenue had risen by 31% from 2023 figures, although it still fell 23% short of pre-pandemic levels from 2019.

By fLEXI tEAM