Regulating VIP-room Contractors in Macao: The Current Situation—and Future

VIP-Room Contractors have played a pivotal role in Macao gaming industry as their high-roller customers have brought in over 70 percent of gaming revenue in the last two decades. They, however, have continually been criticized due to the troublesome ways of doing business and the loose regulation from the government. Macao government began to license gaming promoters in 2002. But the effectiveness of the licensing system is questionable. On one hand, the scope of licensing is too narrow. Only the shareholders with 5% of shares and above, directors and the key employees which limit to the top rank of officers such as CEO are required to apply for licenses while other players in the VIP rooms such as the investors, reps and loaners are not. On the other hand, the regulatory body just conducts paper check work instead of investigating the background of the applicants. The paper will develop as follows. The first part examines how a VIP room works in practice in Macao. The second part describes how Macao government regulates the VIP-room contractors. The third part discusses the problems existing in the regulatory system of Macao. The last part discusses possible ways for the regulatory body to improve the effectiveness of regulating the VIP-room contractors