Asian regulation

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ASIAN REGULATED ONLINE GAMBLING IN SIGHT?

Macau shows Its hand on remote gaming rules

The timing and location chosen by Macau regulatory officials to announce a dynamic new remote licensing jurisdiction this week was perfect - the high profile Pacific I-Gaming Congress in the territory, which was attended by everyone who is anyone in an online gambling industry looking for new markets to replace lost U.S. business.

The surprise announcement had delegates abuzz at the possibility of regulation for online gambling operations in the Asian region, centred on Macau, and the Macau Gaming Commission made the most of the opportunity, announcing a full set of new proposals designed to meet online operator demands for licensing jurisdiction at the gateway of the People’s Republic of China.

“We have everything set up, we are building the framework and we take the view that that we should take a bold step forward - interactive gaming is there already,” announced Carlos Lobo, Legal Advisor to the Macau Gaming Commission.

In terms of a 2001 law, online gambling is currently forbidden in the former Portuguese colony other than special exceptions for horse and dog racing bets over the telephone and Internet, but Lobo intimated that the Commission wants to open up the market, implying that legislative changes are possible.

Macau's gambling laws are due for extensive review and updating says Lobo, revealing that this exercise is due to commence in March 2007 and will likely take six months to complete.

On a more cautious note, however, Lobo added a caveat to his optimistic views on remote gambling licensing, saying: “The recommendations are our policy advice - what the government decides is a completely different matter.”

Jorge Oliveira, Macau’s Commissioner for Gaming outlined the proposals for an “open legal framework” to regulate remote gambling, but also warned that: “These are not features that have yet been passed, but we intend to regulate everyone, anyone who accepts bets, including betting exchanges, will be regulated, and the regime will be open to all.”

Oliveira said the new remote rules will place high importance on player protection and identity verification: “We are aware that online operators frequently exchange customers - but we have a lot of spotlights on us and we don’t want to place unfair burdens on operators. At the same time though we don’t want a situation where online licenses become a burden on the government.”

According to Oliveira prospective Macau licensees will have to demonstrate their suitability, technical aptitude and financial capacity.

The likely validity of a Macau remote gaming license will be five years, says Oliviera, predicting that, “There will be no licenses lasting for an indefinite period and we have no moral problems with a limited license term because there is not a lot of investment by the operator, at least not in the same way the land–based industry does.”

The regulat was also not prepared tpo commit to suggestions that a Macau license would guarantee access to Chinese online gamblers, stressing that the Macau Commission was not willing or able to enter into any agreement with the Chinese government that could bring with it "...more difficulties than benefits.”

In an apparent criticism of the UK gambling reform process, Oliviera said that Macau did not wish to follow a similar path to that taken by the UK Gambling Commission, "...going to conferences for two years but refusing to name a taxation rate, instead holding it back like the cherry on the cake.”

He instead indicated that the tax levied would be on gross gaming revenue and would in all liklihood be in the 25 percent area, and would exclude all other taxes. Macau currently has a very comfortable 200 percent budget surplus as a result of massive tax revenues from the land based casinos, and that figure is set to rise to a 300 percent surplus by 2009.