Macau Casino Dividend Disbursement Program Causes Unrest Amongst Operators
Casino dividend disbursement is one way in which Macau casino shareholders are supposed to get a return on their investment. However, there seems to be trouble with the local government. They want to limit the amount that casinos pay their shareholders and are willing to use legal means to do so.
This is all part of Macau’s push to be stricter with gaming regulations. This new proposal will be part of the legal amendments that will go through a public consultation that will end on October 29.
Macau has 41 operators casinos, with six operators running them. The six operators include MGM China Holdings Limited, Sands China Limited, Wynn Macau Limited, Melco Resorts and Entertainment Limited, SJM Holdings Limited, and Galaxy Entertainment Group Limited. All these operators have 20-year licenses that are set to expire in June 2022.
Normally, casino license renewals are easy but the new rules are forcing gaming operators to face new certifications and the need to follow the newly updated rules of the region. One of the sticking points is that framework requires that operators ask permission from the local government before it can disburse their dividends.
Lawyers from MdME Lawyers, a law firm from Hong Kong, point out that this would be a difficult thing to work out since there is no previous example of this in the local market. Lawyers Rui Filipe Oliveira and Rui Pinto Proenca say that it would be very difficult to enforce the prevention of disbursement. Additionally, they state that preventing the disbursement goes against everything that a company does, which is to aim for maximum profit. Stopping that disbursement would be like stopping essential public services.
Another detail that Oliveira and Proenca revealed was that the dividend rule was supposed to ensure that casino profits would be invested into the city. However, the lawyers say that would only discourage casino operators from investing in their Macau casino operations since they would be losing out on the profits. This would be against the stated goals of the disbursement change of ensuring the community of Macau benefits more from the local casino industry.
Suggested Changes
Instead of stopping dividend disbursement, Oliveira and Proenca have suggested that Macau simply use investment obligations like a lot of other cities. Local legislation already has a law in place that allows the government to request casino operators to invest a specific amount into the region. They believe that this would be much better than forced stoppage of casino dividends.
David WalkerAuthor
David is our resident 'down under' contributor, letting us know what is going on in the southern hemisphere, he is also keen blackjack player
