China to criminalise the luring of its overseas gamblers. According to state-run media outlet China News Service, the country’s Standing Committee of the National People’s Congress conducted a second reading on the amendment to the mainland China criminal law. The reading incluses a fresh targeting of “cross-border” gambling activities.
The Agency reported that the legislative update included the concept of a new crime of “organising and soliciting casinos abroad” by means of which mainland residents could be permitted to gamble overseas. The amendment also reportedly included modified terms of punishment for the new “establishment of casinos” crime within the mainland.
The report did not define either the proposed penalties for the new crime or the new penalties for the current crime of building mainland casinos; nor did it define when it was possible that the proposal would come into force. However, the study highlighted official criticism against “cross-border gambling,” although not attributed to an established source, stating that it had caused a “significant outflow of money” as well as “severe harm to the national image and economic security.”
The definition of “cross-border” gambling was not explained by the report. A number of investment analysts have said that Macau is generally not regarded as a “cross-border” area, a semi-autonomous region of China and the only place inside China to have legalised casinos.
In any event, a number of studies have recently suggested a rise in cross-border capital controls even between the mainland and Macau, with commentators suggesting this may have restricted the extent of the gross casino gaming revenue recovery in Macau as China recovers from the pandemic of Covid-19.
On Tuesday following the report, JP Morgan Securities (Asia Pacific) Ltd shared, that if enacted, China’s legal change might further cloud the business outlook for junket promoters, that traditionally act as go-betweens to enable rich mainland residents to gamble in Macau and elsewhere.
Analysts DS Kim, Derek Choi and Jeremy An stated “While promotion of gambling for/by overseas casinos has already been understood to be illegal for industry participants, a clear-cut ban on such activity would undoubtedly lead to fear among many junket operators and agents, in our view, as even a personal solicitation [of a mainland player] may be viewed as… illegal under the reported amendment.”
A Monday note from brokerage Sanford C. Bernstein Ltd, which covers Macau gaming stocks, said that currently there was “uncertainty surrounding potential money flow constraints out of China” in relation to Macau casino business.
On the Chinese mainland, the operating or promotion of casino gambling in online or bricks and mortar form is illegal, as is the direct marketing within the mainland, of gambling operations based outside the mainland’s borders, including any play in the Macau Special Administrative Region.
[image: Rikke Filbært]