Macau: Proxy betting ban

Author: | Published: 20 May 2016
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coelho Vera-Cruz
Carlos Eduardo Coelho Ricardo Vera-Cruz

Macau's Secretary for Economy and Finance has announced the end of proxy betting in Macau casinos, effective from May 9 2016. According to the announcement, which follows a decision from Macau's gaming regulator (DICJ), the reason for the ban is "to avoid unnecessary misunderstandings or risks of irregularities" in the so-called junkets activity of VIP gaming.

Proxy betting is a way to allow patrons to place their bets, outside the physical casino premises, through a telephone by proxy (normally a junket representative that is physically present at the gaming table). Gaming concessionaires have been allowing this practice in VIP rooms (or, at least, have been allowing practices that are somehow similar) for patrons that cannot or do not want to be present at the table. However, doubts have been raised regarding its legality.

Furthermore, according to the Interim Review on the Gaming Industry, which was published on May 11 2016, proxy betting was identified as a problem associated with the junket's activity. This is because betting remotely by telephone allows patrons to hide their identity from the industry supervision mechanisms, thereby allowing them to escape from the responsibilities set out in applicable regulations. Indeed, proxy betting does not comply with the so-called know-your-customer protocols and does not allow verification of the bidder's identity and funding source, which necessarily entails money laundering concerns.

From the content of the announcement (at the time of writing, no further information has been provided) it appears that, more than a strict ban on phone betting, the regulator's decision was to ban the use of mobile phones at gaming tables. This raises questions about who is responsible for enforcing this prohibition and how this enforcement will be supervised. It seems that the gaming concessionaires will be responsible for enforcing the ban: they are the only parties that can verify and prevent the use of mobile phones at gaming tables.

The ban, which is purported as a way to regulate and promote the healthy development of the gaming sector, is likely to have a negative impact on VIP gaming table revenues. This is because, according to several published reports, mobile phone betting represents between 5 percent to 10 % of VIP revenues.

Carlos Eduardo Coelho and Ricardo Vera-Cruz