REUTERS/Paul Yeung/Files (CHINA)

Ambiguity in new Chinese Gov’t overseas gambling law amendments – Sands President

Sands China President, Wilfred Wong, noted in a recent group conference call that there is a certain “ambiguity” in recent criminal amendments enacted by Chinese central authorities targeting the organizing or soliciting of Chinese citizens to gamble overseas.

China’s National People’s Congress passed an amendment to its criminal law that will, from 1 March 2021, create a new crime against cross-border casinos found to be organizing or soliciting Chinese citizens to gamble and increase penalties for those found guilty of serious breaches.

The amendment specifically targets anyone who ‘organizes mainland Chinese citizens to gamble outside the country (borders)’

“They specifically say outside of the country, which, as you all appreciate, Hong Kong, Macau, and Taiwan is generally considered within the country. But then they leave ambiguity equity thereby putting the word offshore inside the bracket after outside the country. Now this introduces the ambiguity, and I was discussing this with both our lawyers in Beijing and the National People’s Congress,” Wong noted in the conference call.

According to Wong, Chinese legal experts consulted by the group said that while the central people’s government recognizes the special status of Macau, they do not want the SAR to be exploited as a base for organizing such activities to take people outside of the country, such as the Southeast Asian countries.

Last month China’s Ministry of Culture and Tourism (MCT) announced that it would extend its travel blacklist of overseas gambling jurisdictions or countries that promote gambling tourism for Chinese nationals.

Although the exact blacklist is not known, analysts believe it refers to Southeast Asian gaming jurisdictions popular for Chinse overseas gamblers such as Vietnam, Cambodia, Philippines or even Australia.

Wong underlined that the list adds another layer of “ambiguity”, which will “ultimately be decided by the authorities and the courts going forward”.

“But at this stage, it is for sure that any person or a junket trying to use Macau as a base to organize gambling to other countries would be condemned,” The Sands President added.

NagaWorld Hotel and Entertainment Complex in Phnom Penh, Cambodia

The Sands management also indicated in a recent group conference call that the company has not been consulted either by Macau or Chinese authorities if participation by a Chinese company in the group would be a condition for any future gaming concession.

With local gaming concessions set to expire in 2022 and authorities preparing for the public tender that will decide the future concessions questions have been raised if US-linked operators would see investment by Chinese groups as a way to increase their chances of seeing their licenses renewed.

“We have not picked up any nor have we been consulted on whether there should be the participation of Chinese companies […] there were, in the past, some suggestions of people saying, state-owned enterprises might come in. I don’t think this really in line for their policy consideration. Whether private Chinese companies would be allowed to participate in Macau, and under what circumstances, these are things that have not been brought to us at all,” Wong stated.

“So the only thing I can say at this stage is that we will continue to do our best in Macau and show that we are a locally rooted company because we are listed on the stock exchange in Hong Kong so we are just the same as any Hong Kong company and that we do everything, even better than other competitors”

Last month Snow Lake Capital Limited, an Asian investment management firm published a letter sent to the MGM Resorts International Board of Directors urging them to sell 20 per cent of local gaming concessionaire MGM China to a Chinese company as a strategic investor.

The group argued that Introducing one of China’s top consumer internet platforms as a significant strategic shareholder for MGM China would create a win-win transaction, as it distinguishes MGM China by bringing non-gaming capabilities and resources to Macau at the industry’s post-COVID-19 low.

MGM later underlined that it ‘remains committed to Macau’, with analysts also doubting the investment possibility would be viable or even allowed by mainland authorities.

Sands CEO and Chairman, Rob Goldstein also underlined that no mentions had been made by government officials of any Chinese stakeholder demand or even intentions expressed by Chinese businessmen in this direction.

“We’ve been going to Beijing for around 20 years in Macau, and having endless meetings. […] I’ve never ever had a conversation with one person who mattered whoever said that to me or even made that comment, in fact, if anything, they kind of chuckle because to Wilfred’s comment, there’s not a big appetite to invest in gambling,” Goldstein noted.

“I did once knew a very, very good person, a very important guy in the Chinese world, a businessman. And I suggested [this], so he started laughing, he said no one is going to buy into a Chinese gambling company whether it’s Macau or Las Vegas because that’s not what we’re going to do”

As for the tender process itself, Wong noted the group on a tight deadline, since the concession is to expire in 17 months, and with the group still “eagerly waiting” for the government’s direction.

“We only know that the government is adopting a process, which includes public consultation on the performance of the concession is and that the targets of achieving diversification, that amendments to the legislation have to be introduced into the legislative council, and then the bidding process begins,” he added.

“We also know that there is a legislative council election scheduled for September this year. So all these are coming into play, and we are coming up against a very tight timetable. We don’t know whether this will begin very soon because right now, the government is all involved in the fight against the pandemic”