Macau has enacted the “Law to Combat Crimes of Illegal Gambling,” which introduces significant changes to tackle unlicensed gambling and associated practices in its gaming sector. Effective October 29, the new law strengthens the city’s measures against illicit gambling activities and aligns Macau more closely with China’s broader regulatory objectives.
Tougher Penalties for Gambling Violations
The law, published in the Official Gazette on October 28, introduces stringent penalties for various illegal gambling activities, such as the notorious “multiplier” practice, unlicensed online gambling, and unauthorized currency exchanges. Under this new legislation, individuals involved in illegal gambling or online gambling could face prison terms of one to eight years—a marked increase from the previous maximum penalty of three years. Additionally, participants in unlawful gambling activities risk up to six months in jail, while those involved in unlicensed currency exchanges could face up to five years.
The “multiplier” practice, a form of under-the-table betting that artificially boosts the value of on-table bets, has come under intense scrutiny. Recent criminal cases involving former junket operators implicated in tax fraud have brought this practice to the forefront, prompting Macau’s government to address it explicitly under the new law.
Crackdown on Unauthorized Online Gambling and Money Exchanges
In response to the rise in illegal online gambling and unlicensed currency exchange, the law also prohibits the promotion and operation of unauthorized online gaming. Macau’s government has reiterated that it has no plans to issue licenses for online gambling operations, signaling a continued hard stance on unregulated digital gaming activities. To bolster enforcement, law enforcement agencies now have extended powers for undercover investigations and nighttime searches across Macau’s casino and resort areas, a move that Macau’s Judiciary Police believe will support the crackdown on illicit gambling-related activities.
Broader Regulatory Shift and Foreign Investor Concerns
The introduction of these measures follows the October 2024 election of Sam Hou Fai, Macau’s new Chief Executive and the first mainland-born individual to lead the region. His leadership reflects a shift towards tighter regulatory control, which mirrors Beijing’s economic strategies, particularly the “common prosperity” and “dual circulation” policies. These strategies aim to reduce Macau’s dependence on gaming revenue, potentially challenging foreign gaming operators who rely on the region’s casino industry.
A recent report by Steve Vickers and Associates (SVA) notes rising regulatory pressures on foreign gaming operators in Macau, as the government encourages investment in non-gaming sectors such as tourism, entertainment, and conferences. With over 11,000 arrests in 2023 related to unlicensed currency exchange and underground banking in Macau, regulatory scrutiny has intensified as Beijing attempts to control capital outflows from the mainland through Macau’s casinos.
Adapting to the New Regulatory Landscape
The regulatory shift signals both opportunities and challenges for foreign investors as Macau’s policies align with China’s broader economic goals. SVA recommends that investors with interests in Macau and China adapt their strategies to address the heightened regulatory risks in the evolving environment. Casino operators are expected to diversify and support non-gaming sectors, a move that reflects China’s broader push for economic diversification.
As Macau’s regulatory framework continues to evolve, investors and businesses operating in the region will need to navigate carefully amid rising political and financial pressures, reassessing their strategies to stay aligned with the city’s—and by extension, Beijing’s—goals.
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