Macau’s current legal framework does not include provisions that would allow the government to control how dealers distribute dividends, as proposed in the revised gambling law, the lawyers said.
The consultation document unveiled by local authorities on September 14 for the modification of the local law on games proposes to subject the distribution of dividends by casino dealers to the authorization of the State.
The intention of this control is explained in such a way as to ensure that the profits resulting from gambling activities obtained by the dealers are applied “more appropriately to the promotion of the sustainable and diversified development of the Macao SAR”.
According to lawyer Oscar Madureira, currently “there is no legal framework to justify any intervention by the Macao authorities in the distribution of dividends from private companies.
“In this case, this function / right falls to the partners or shareholders who are deliberating on the matter,” the lawyer for the Lektou law firm told the Macao News Agency.
However, the gambling lawyer admitted that this change could be made as part of the future gambling law, but that it should in this case be included in the concession contracts.
Meanwhile, lawyers at law firm MdME have released legal analysts on the feasibility of this proposal by gambling authorities.
“The consultation document suggests that the distribution of dividends be subject to certain pre-defined requirements specifically designed for this purpose and to the prior authorization of the government. However, no details are provided on what such requirements may be and the nature of the government authorization, ”lawyers Rui Pinto Proenca and Rui Filipe Oliveria say in the document.
According to lawyers, under the current legal framework, the payment of dividends is only subject to shareholder approval and the only restrictions allowed at the discretion of shareholders are those that impose a minimum percentage of dividends that must always be distributed. , rather than a maximum cap. .
“The shareholders of the game dealers are therefore free to distribute dividends as they see fit, in compliance with the thresholds of the Commercial Code and others.
non-distributable reserves fixed in the articles of association of their respective company ”, adds the document.
MdME’s lawyers also warn that the introduction of limitations on the distribution of dividends by private companies to its shareholders, other than those described above, “has no parallel example in Macau’s legal framework”, such a requirement for government approval has never been introduced, even in the context of concession contracts for essential public services, such as the supply of water and electricity or the import and transport of natural gas.
The document considers that the effectiveness of the measure proposed by the government to achieve the objectives of ensuring continued investments in diversified economic and community development was “questionable” and stressed that taxation and the determination of investment obligations specific for dealers under their contracts could be more viable.
The 45-day public consultation on the new revision of the gaming law was launched on September 15 and is expected to last until October 29.
The consultation document identifies the main elements under consideration, namely, social responsibility; non-gaming development; strengthening government surveillance and strengthening penalties for violations.
In the document, the Macau government also recommends the appointment of official delegates to be appointed to oversee the concessionaires, and that the percentage of shares held by local general managers should increase from the current minimum of 10 percent.