Gaming law amendment bill first draft approved at Legislative Assembly, ‘satellite casino’ issue raises doubts

The Legislative Assembly has passed the draft gaming law amendment bill this afternoon, with legislators questioning Secretary for Economy and Finance Lei Wai Nong on how authorities will assure resident work positions from local ‘satellite casinos’ and VIP rooms will be protected under the proposed amendments.

The much-expected bill was published on January 18, following a press conference held by the Executive Council and was on the agenda for discussion and vote at the AL today (Monday).

The draft bill sets a maximum of six gaming concessions that can operate for up to ten years, with a 3-year extension possible under exceptional circumstances. The amendment proposal also includes a number of new regulations for both casino operators and gaming promoters.

Once the bill is approved at first reading, it will be sent to one of the legislature’s standing committees for detailed article-by-article review before being sent back to the Legislative Assembly plenary for second reading approval.

The bill received 30 votes in favour and one against by legislator Ron Lam U Tou who contested the lack of information provided by the draft on how the satellite casino issue would be dealt with, remembering that there will not be a public debate during the committee phase discussion, which is held behind close door sessions.

‘Satellite casinos’ are venues controlled by independent investors, but who lease on the gaming licence of one of the existing concessionaires, with about 18 satellite casinos currently operating in the city, mostly under SJM’s gaming license.

Under the city’s new regulatory framework any casino operating in Macau will have to be established in an asset that is owned by a gaming concessionaire, implying the current ‘satellite casino’ system would have to be upended.

A three-year transitional period will be granted for the entities responsible for properties holding casinos operating under service agreements to create closer ties to any one of six concessions to be granted in future, with no more details provided in the law on how that transfer of assets would take place.

Before the final voting, almost all legislators who decided to intervene in the plenary session raised the issue of satellite casinos, how that transition would proceed and how resident workers directly employed by the managing entities would maintain their employment.

‘We know there are at least 18 satellite casinos that will be impacted, involving tens of thousands of employees […] We have many people that are unemployed, can concessionaires absorb these unemployed workers? Could a ruling be added to the bill that new concessionaires have the responsibility to hire these unemployed residents?,” legislator Chan Se Wai inquired.

Secretary for Economy and Finance Lei Wai Nong

Legislator Ella Lei Cheng I also asked authorities to later clarify what will be the relationship between gaming concessionaires and the managing entities in charge of ‘satellite casinos’ during the transitional three year period and what would happen to the employees directly managed by ‘satellite casinos’.

Last week the executive director of one of the city’s largest Macau Legend Development Ltd, Melinda Chan Mei Yi – which manages several properties with casinos run under a services agreement with SJM – defended that these venues made many positive contributions to the local economy, through employment and SME contracts, and warned that potential closures would hurt the livelihoods of many local residents.

In his reply to legislators, Secretary for Economy and Finance Lei Wai Nong defended that the gaming law amendment does not intend to “kill or ban satellite casinos”, but that since casinos operated under gaming concessions are considered government properties, they would need to be defined in a way that they could be returned to government control in the future.

According to the bill, in case a gaming license was revoked for any reason, gaming areas under the license and all equipment contained within would be seized by the Macau government.

“Casinos belongs to a concessionaire, if a new concessionaire is created there will be a transitional period of three years where the casino has to be registered as a movable asset of the concessionaire,” Lei noted.

Lei also warned that the concessionaire and the entity responsible for the ‘satellite casino’ shall bear the responsibility of ensuring the employment of their employees, not the government.

“The workers of the respective casinos belong to the concessionaire, not only the workers but also the croupiers and inspectors belong to the concessionaires. Therefore, the concessionaires have to resolve the situation in order to ensure the employment of these workers. Current concessionaires have to assume these responsibilities,” Lei noted.

Newly elected legislator Ron Lam – who voted against the general draft – addressed strong criticisms to authorities and the Secretary concerning the lack of information provided to the public and legislators surrounding the ‘satellite casino’ issue.

“The government has so far not provided the public with a general idea of how it wants the gaming sector to be in the future. The draft bill has many issues that warrant clarification and what the government wants? The Secretary can’t even provide yet any clear details on what will happen to ‘satellite casinos’,” Lam said.

“The Secretary says there will be a three-year transitional period but how many satellite casinos do we even have? The 18 or 20 casinos under a managing entity would be reclaimed by authorities? Gaming workers are very worried, and at the moment many VIP room workers are unemployed […] how will we deal with ‘satellite casino’ workers?”

Questioned by legislator Jose Pereira Coutinho Pereira on how many workers left unemployed by the closure of junket operated VIP rooms in local integrated resorts, the Secretary revealed since December 2021, some 1,874 workers affected by closures had been assisted by the Labour Affairs Bureau (DSAL) with skill training and job matching.

The Secretary also admitted the need to extend current gaming licenses beyond June 2022 could be necessary but without giving further details and promising to provide more information later.