Ripple effect of Macau’s junket crackdown still felt two years on
A number of lawsuits are pending against gaming concessionaires after clarification of whether they are jointly and severally liable for players’ deposits, say Bruno Almeida and Paulo Alves Teixeira of Riquito Advogados
In 2021, the pressure on the Macau gaming industry reached a historic high with the arrest of the heads of the city’s two largest gaming promoters (commonly known as ‘junkets’) following months of police investigations. Although two years have since passed, the consequences of those events continue to be felt.
Recently, a number of lawsuits have been filed in the Macau courts against those two gaming promoters by players who claim to have deposited money with them and to have been unable to withdraw it since their collapse. This type of litigation is not unprecedented. One of the most notable lawsuits of this kind was filed against Dore Entertainment in 2015, which had been one of the largest junket operators in Macau until it collapsed after a former employee reportedly absconded with almost HK$700 million.
The matter under dispute in that lawsuit was whether casino companies could be jointly and severally liable for the actions of the junket operators they engaged in business with. In November 2021, the Macau Court of Final Appeal ruled in favour of one of the affected gamblers and ordered Dore Entertainment to repay their deposit in the amount of HK$6 million, while clarifying that Wynn Macau, the owner of the casino where Dore Entertainment had operated, was jointly liable.
While this interpretation of the law was upheld by the same court in a second, more recent ruling, the matter is yet to be fully clarified by courts and the following question remains unanswered: will gaming concessionaires be at all times jointly and severally liable with junket operators, regardless of the type of liability and/or the nature of the obligation in question and/or whether the harmful event has taken place within the concessionaire’s premises?
Although such rulings may hint that the general understanding of the higher courts is that joint and several liability may only apply in certain cases, the question seems to have been put to rest with the publication of the new legal framework for the operation of casino games of chance with Law 16/2022. The law includes a provision that clarifies that concessionaires are only jointly and severally liable for deposits made with junket operators if:
They have concession rights over the casino where the deposit was made; and
Those deposits were used for betting on, or won from, games of chance.
Aware of the financial troubles faced by junket operators, players have been directing their attention towards gaming concessionaires and the merits of their claims will ultimately be decided on a case-by-case basis. Several lawsuits of this kind are pending in the Macau courts, some of which have been initiated simultaneously against all concessionaires, irrespective of the plaintiff (player) having made deposits or placed bets in their casinos or not.