Asian Economic News: Macao legislature passes law to open up gambling sector

HONG KONG, Aug. 31 Kyodo

Macao's legislature has passed a new law to open up the gambling sector to up to three operators, marking the scrapping of a 40-year-old monopoly system that is to expire by the end of the year, the enclave's government said Friday.

The Legislative Assembly in the former Portuguese territory that returned to Chinese rule in December 1999, approved the legislation on the gambling industry late Thursday.

The new law states that a license bidder must have to set up a shareholding company in Macao that will only be used for gambling business.

Successful bidders will be allowed to operate for a period of up to 20 years, with the possibility of renewal for another five years at most.

Taxes to be levied on license holders will be raised to 40% from the present 31.8%.

Direct taxes from gambling already contribute a major share of Macao's fiscal revenue. In the first six months of this year, the enclave received about 3 billion patacas ($373 million) in gambling taxes, up 9.6% from the same period last year.

The lucrative industry has been monopolized for the past 40 years by Macao Tourism and Amusement Co., which currently runs 10 casinos, as well as horse and greyhound races and a number of lotteries in Macao.

The territory's government decided to open up the gambling industry to encourage more competition and to better regulate the operations when the company's current contract expires by the end of this year.

A Macao government spokeswoman said the administration will work out and issue the procedures of tendering the licenses soon.