China flags imprisonment for people who entice residents to gamble overseas

China has made legal changes which could lead to any person who organises or solicits mainland residents to participate in overseas gambling to be punished by a prison term of up to 10 years.

GGR Asia reports the punishment would be applicable for cases where the amounts of money involved are “serious”, or for cases considered to have “grave consequences”.

State-run media outlet China News Service had reported on October 13 the planned creation by the country’s Standing Committee of the National People’s Congress of an offence of, in effect, luring Chinese people for overseas gambling.

The latest draft was published on Wednesday.

The relevant amendments under Article 303 of the Criminal Law – outlined on the WeChat social media account of the National People’s Congress – have been made available for the public to comment on them, until November 19.

One of the amendments concerns an increase in penalties for setting up a casino on mainland territory.

The latest draft suggests the penalty should range from imprisonment for fewer than five years, plus a fine, to “control along with a fine”.

Under the new proposal, in cases where the setting up of a pirate mainland casino had “grave consequences”, it would result in “imprisonment of more than five years, and up to 10 years, along with a fine.”

The current penalty for setting up a casino in the mainland currently ranges from a jail term of fewer than three years plus fine, to “control along with a fine”.

China’s Ministry of Public Security stated on Thursday the authorities had identified in the first nine months of the year, the equivalent of nearly US$150 billion due to exit the country for “cross-border” gambling activities.

Wilfred Wong Ying Wai, president of Macau casino operator Sands China, reiterated during the parent firm Las Vegas Sands Corp’s third-quarter earnings call on Wednesday that the Macau casino sector did not believe the law amendment was aimed at Macau.

The city is the only place in China where casino gambling is legal.

Mr Wong stated: “We understand the National People’s Congress is still debating the final form of that legislation. But we must remember that the main target is really gambling in foreign countries, including particularly internet and telephone betting.”

He added Macau had “never been considered foreign in China.”

The Sands China executive further stated: “All of the casino concessionaires in Macau respect the law in China and we never promote gaming in China, only our hospitality and meetings, incentives, conferences and exhibitions facilities and services.”

He additionally noted: “We believe Macau has a unique place under the ‘One country, two systems’ arrangement in China and the Macau operators would “continue to operate” under the terms of the amended legislation.

Macau’s casino tax revenue on the up

Macau’s casino may have turned a corner, with a 52.4 per cent increase in tax revenue reported by the Financial Services Bureau in Macau for August. 

Calvin Ayre reported in September that the figure, $76.8 million, was a marked increase from a month earlier.

Despite the substantial monthly increase, Macau is still a long way off from its normal revenue levels.

The gross gaming revenue reported by the casinos remains flat and is down 94.5 per cent year-on-year.

The total GGR for the city’s casinos was $166.38 million, an indication that the relaxation of border restrictions has not had a huge impact on visitation to Macau’s casinos.

At the end of August, the cumulative total GGR for casinos in Macau had only reached $4.552 billion, an 81.6 per cent decrease compared to the same period last year.

As a result, Macau was only able to receive about $2.85 billion in tax revenue from its gaming properties.

This is only 29.8 per cent of what it had received over the first eight months of last year, and is obviously impacting previous budget forecasts.

Macau had anticipated taking in about $520 million each month in gaming tax revenue and, with only four months left in the year, there’s no chance it will be able to recover all the losses.

The actual figures represent just 45.6 per cent of the forecasted take for the year and Macau has had to revise its end-of-year projections to reflect the shortfall.

Now, Macau believes it will receive a total of around $6.252 billion in gaming tax revenue by the time 2020 wraps up.

Gaming has always been a major source of revenue for Macau and out of the tax revenue collected in the first eight months of this year, has contributed about 75.3 per cent of the total tax revenue received.

That figure stands at $3.788 billion; however this is 65 per cent lower than what it was for the same period last year.

This drop, combined with additional and unexpected outlays needed to combat COVID-19 will see Macau with a deficit of $4.872 billion for the whole of 2020.