GGRAsia – Macau gaming bill raises doubt on some Mocha slot halls

Macau gaming bill raises doubt on some Mocha slot halls

Apr 12, 2022 Newsdesk Latest News, Macau, Top of the deck

Macau’s gaming law amendment bill in likelihood puts some standalone slot parlours within the city in a similar position legally to so-called satellite casinos, two experts in local gaming regulation suggested to GGRAsia.

All of Macau’s six gaming concessionaires run “slot lounges”, with most of them housed within a casino, according to information available on the website of the local casino regulator, the Gaming Inspection and Coordination Bureau. But five such slot lounges – all under the Mocha Clubs brand – are classified by the regulator as slot parlours located outside casinos.

On the basis that the gaming law amendment bill “mandates that casinos shall be located in a property that is owned by the concessionaire, it is my opinion that this rule also applies to slot parlours,” said gaming law expert Carlos Lobo in comments to GGRAsia.

António Lobo Vilela, a lecturer in gaming law at the University of Macau and former advisor to the local government, noted to GGRAsia that up to now, use of administrative regulation has permitted slot lounges to run in non-casino premises, but administrative regulation is outranked by statute law, including in this case, the new gaming law amendment.

“According to the hierarchy of the sources, administrative regulations cannot contravene laws… the space of the [gaming] machine parlours must be considered a casino,” said Mr Vilela.

The Mocha Clubs chain was founded by Hong Kong-listed Melco International Development Ltd, the parent of Macau casino operator Melco Resorts and Entertainment Ltd, with the concept focusing on coffee-shop style gaming entertainment distinct from the traditional casino market. That business rationale is still mentioned in Melco Resorts’ latest annual report.

According to the annual report for 2021, there were as of December 31, eight Mocha Clubs active. One is on the premises of Altira Macau, a Melco Resorts casino; two are on the premises of satellite casino hotels; two are associated with respective premises of non-gaming hotels; and three are associated with other commercial premises.

In the annual report, the Mocha Clubs business is described as the “largest non-casino based” gaming machine operation in the city. The document adds that Mocha Clubs are operated at either “leased or sub-leased” premises, or under “right-to-use” agreements.

In 2021, Melco Resorts’ operating revenues from Mocha Clubs were US$85.0 million, representing 4.2 percent of group operating revenues, according to the annual report. In 2020 the clubs represented 3.8 percent of operating revenues, and in 2019, they were 2.0 percent of group operating revenues.

Altira Macau’s Mocha operation had 121 gaming machines in 2021. That year, the other seven Mocha Clubs accounted in aggregate for 813 operational gaming machines, according to the annual report.

GGRAsia approached Melco International Development asking if the group would seek to relocate non-casino based Mocha Clubs within its own casino premises. The company said it had no response to offer at the moment.

GGRAsia also asked the city’s gaming regulator for comment on the anticipated compliance criteria for existing slot parlours under the planned new regulatory framework.

The regulator said: “The [gaming law amendment] bill is still in a detailed deliberation stage at the Legislative Assembly. The Macau SAR government is getting fully engaged with the workings of the assembly.”