August 16, 2022

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The Legal System

Reversion definition still unclear in gaming bill draft – Legal expert

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Doubts remain over how to define what areas would revert to government administration under the future gaming law remains once concessions or sub-concession expire, gaming lawyer António Lobo Vilela told Macau News Agency.

Vilela – a Macau-based and author of the Macau Gaming Law Book – recently published a legal paper at UNLV Gaming Law Journal titled ‘The Reversion of Casinos Under Macau’s Concession Model’.

In it, the University of Macau (UM) Gaming Law professor and former advisor to the Secretary for Economy and Finance analysis the revision mechanism that has been in the before and after the current gaming law was enforced in 2001.

The reversion entitles the concession-granting entity to gain possession of certain assets when a concession becomes extinct or any other time upon mutual agreement with a concessionaire or sub-concessionaire.

Under the concession and sub-concession contracts, some casinos and
all gaming equipment and utensils will revert to the Macau SAR on June 26,
2022, which coincides with the term of the current casino gaming concessions
and sub concession.

Authorities have already indicated they will extend the current concessions until December 31 of this year, but the actual enforcement of the reversion clauses still raises some doubts.

“The system [under the proposed draft bill] has some things that make sense and others that do not. The government has decided to apply the eviction system for urban development. So the reversion must happen immediately, so is the same as a house changing landlord with house keys exchanged, it’s what we call an administrative takeover of the asset,” Vilela told MNA.

“However there are formalities under this eviction and takeover system, a notice has to be issued, so the reversion is no longer automatic”

The draft bill also for the first time defines that all dependencies essential for the functioning of a would also be reverted, facilities in other areas of the integrated resorts such as the cashier, a staff canteen, laundry or surveillance room.

“This needs to be evaluated case by case […] The definition of casino in the bill is not just the gaming floor but everything completely crucial to the functioning of the casino,” Vilela noted.

“So people might think the version only includes the casino but it also involves the back office facilities”

The crux of the matter concerns defining the essential and non-essential facilities linked to the gaming floor that would revert, especially in integrated resorts in Macau – developed in the American model – where the casino is a central feature of the property.

“For example, a canteen in a large resort is not specifically used for casino staff but also the remaining property staff, so it would not necessarily be an area that would be reverted, so some common sense will be required on how the recession is carried ou,” he noted.

A new version of the general gaming law presented by the Macau SAR government allows for satellite casinos to continue operating even if the property where they are located is not completely owned by a gaming concessionaire.

This represented a turnaround from the previous stance that could see these casinos closed or reverting to the public domain if the situation was not resolved in a three-year transitional period after the new law was is enforced.

The Legislative Assembly standing committee currently evaluating the final draft of the general gaming law amendment still believes the final version could be signed by June 10 and sent to the plenary for voting.

No indications have been provided by the committee that any changes to the reversion settings established in the previous draft bill version will be altered.

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