Macau’s new Illegal Gambling Law, which introduces criminal sentencing for illegal money exchange and activities such as “betting under the table”, presents more challenges for the city’s waning junket industry.
Macau’s Legislative Assembly recently passed the second reading of the city’s new Illegal Gambling Law, officially greenlighting the legislation after almost a year of deliberation. The law presents a complete legal framework for combating illegal gambling and, after officially coming into effect as of Tuesday 29 October, operates in conjunction with Macau’s new gaming law, the law on junkets and the law on the legal regime of gaming credit.
From the government’s perspective, the introduction of these new regulations aims to strengthen the supervision of the gaming industry and protect consumer rights while fostering the healthy development of the industry. But some have expressed concern about excessive regulation, which could inhibit innovation and competition, leading to a decline in market vitality. There are also concerns that strict legal clauses could render it difficult for smaller-sized operators to survive, especially junket operators.
For veteran junket representative U Io Hung, the revision of the four gaming laws will definitely have an impact on the sector.
“Looking back at all the laws, there are rules such as that junket operators have to give up revenue share and can only serve one concessionaire. The space for the industry has for sure shrunk,” he said.
The Illegal Gambling Law itself has added clauses that allow for undercover investigations and the conducting of searches at any time, day or night. The maximum penalty for illegal gambling is also bumped up significantly to eight years.
In U Io Hung’s opinion, some industry members feel that the new laws are “too strict”.
“From the legal perspective, the matter has escalated to the level of organized crimes. It is as if these gambling crimes are as serious as those like murder or arson,” he said.
He also highlighted the criminalization of “money exchange gangs” under the new law, suggesting that industry members are worried about problems with law enforcement and that some people may inadvertently breach the law.
“In junket operations, it’s very possible to encounter issues concerning currency exchange,” he said. “This will have to be handled with caution in the future.”
There were a total of 36 licensed junkets in Macau in early 2023, but that number dropped to 18 on 1 January 2024. According to the latest data from the Gaming Inspection and Coordination Bureau, the number of junkets has grown back to 24 by September, while that of licensed collaborators has risen to 12.
Asked what this recent increase meant for the junket industry, U Io Hung replied, “Actually, some of them are junkets with prior experience. Since they still maintain communication with some clients, they have decided to return to the sector.
“It’s impossible for the junket sector to return to the past, when Suncity Group was still there. Now that laws are there to regulate the industry, the whole business environment is different.
“Industry members also should not reminisce about the past glory. They should instead face forward and think about how to better develop the industry.”
He also revealed that there is now more cooperation between junkets and concessionaires, despite the presence of competition between these junkets and the direct VIP operations of the concessionaires themselves.
“Junkets nowadays are not only seeking high rollers, they are also starting to go after mass market clients,” U Io Hung explained.
“It is just like real estate agents. They do not only sell residential apartments, but also parking space and shops. They even do commercial real estate leasing.”
According to U Io Hung, junket operators are now looking ahead to the inauguration of incoming Chief Executive Sam Hou Fai in December, after he was officially voted in by the Election Committee last month (October).
“Industry members hope to continue operating in the future, with the space for business expanding gradually,” he said. “We are not dwelling on the old times, but are looking forward to the future development of junkets.”
