In 2022, the Macao police identified over 3,500 people suspected of illicit money-exchange activities in or near casinos, and most of the suspects came from the Chinese mainland. A high-profile inspection was carried out by the police in early March, covering gaming floors, shopping zones, and hotel-related areas at Galaxy Macau and The Venetian Macao on Cotai, as well as equivalent areas of MGM Macau and StarWorld Hotel on the city’s peninsula.

In September, Macao’s secretary for security, Wong Sio-chak, said the city’s authorities will consider the criminalization of unlicensed money changing in or near casinos. The Illegal Gambling Law (Law 8/96/m) criminalizes the unlicensed supply of games of chance. It prohibits all forms of operation, promotion or assistance of gaming by unlicensed entities or individuals, or outside the areas that have been approved as casinos or gaming areas, as well as fraudulent gaming in approved areas and the extension of credit to players by unlicensed entities or individuals.

Because the Illegal Gambling Law will soon be reviewed by the Macao Special Administrative Region government, the recent upsurge in illegal money-exchange activities has sparked a maelstrom of legal commentary on proposals to incorporate provisions into the revised Illegal Gambling Law to criminalize illegal money exchange activities in casinos. 

For instance, one of the authors of this article stated earlier that the presumption under Article 13(2) of the “Unlawful Gambling System” should be applicable to “money exchange”, i.e., money-exchange activities in casinos are illegal so as to make it easier for authorities to carry out their duties.

Before examining whether we should lift the heavy burden-of-proof millstone from the neck of the prosecutor to prove every element of the proposed criminal charge against illegal money-exchange activities, we believe that three important factors provide the necessary context for us to accurately assess the threat posed by these activities.

First, the rapid growth of these activities has caused concern that illegal money-exchanges may have an adverse effect on the efforts of the mainland authorities to control cross-border currency flow.

According to Macao-based lawyer Sergio de Almeida Correia, addressing such concerns is in line with the overall objectives of the revised Macau Gaming Law, which stipulates that gaming operations must be aligned with Macao’s policies against cross-border illegal flow of capital. These objectives are laid down in Article 1-A of the Gaming Law.

In the past, mainland visitors liked to use UnionPay cards to evade exchange controls imposed by the mainland authorities to clamp down on illicit capital outflows. As a result of the removal of UnionPay point-of-sale machines by Macao banks, pawn shops inside the casinos are no longer offering UnionPay cash-back services. Besides, ATMs have been installed with a facial recognition system to prevent mainland users from withdrawing money from accounts that are not theirs. In theory, mainland authorities can effectively impose controls on the amount of yuan that can be brought across the boundary per trip.

But there remains a gap between theory and practice. Some illegal money-exchange agents are good at finding innovative ways to navigate the wild criminal seas. These agents offer better rates than licensed money-changers and banks. Though the transaction is illegal, some people think it is a victimless minor offense that only violates the legal rights of licensed money-changers and banks. The unlicensed exchange of money is currently punishable under the city’s Financial System Act, which can result in a fine and a publication of the sanction in local media. From the perspective of China’s financial stability, the fact that some agents offer unauthorized cross-border transactions has sent a bracing chill into the bones of the law enforcement agencies in Macao.

Second, crimes arising from illegal money-exchange activities, such as homicide, money laundering, fraud, robbery, and theft, have become serious security problems in Macao. Such heinous crimes should not be allowed to destabilize the city.

Third, we cannot turn a blind eye to the fact that illegal money-exchange agents target certain mainland visitors in or near casinos. Unlucky losers who urgently need cash to reclaim their foothold and extend their gambling session are often on the radar of these agents.

Providing extra funds for desperate gamblers to stage a comeback constitutes a violation of responsible gambling policies propagated by the Macao SAR government. There is no doubt that a small percentage of gamblers develop an addiction that compromises, disrupts, or damages personal, family, or vocational pursuits.

In a previous interview, one of the co-authors persuasively argued that those responsible for drawing up the revised Illegal Gambling Law should reverse the burden of proof. At a glance, the reversal appears to affect the defendants’ “presumption of innocence”, but this understanding is wrong in that the reversal only becomes operative when the alleged illegal money-exchange activities took place inside casinos, and the reversal is rebuttable by evidence to the contrary. Having said that, we should not delude ourselves into thinking that the police can easily find adequate evidence to establish the necessary nexus between illegal money-exchange activities and promotion of illegal gambling. Keeping a watchful eye on covert activities inside casinos poses further operational problems for law enforcement agencies. Therefore, the reversal is reasonable and necessary.

The reversal would operate as follows: If an accused person has engaged in illegal money-exchange activities in casinos, he or she is presumed to be criminally liable for violating the revised law of illegal gambling because of the provision of funds for gambling. To make the presumption clear, law draftsmen should draw inspiration from Article 13 (2) of Law 8/96/m. Finally, heavier punishment should be imposed on these activities as a deterrent.

The amended Financial System Act, which came into effect on Wednesday, makes no provision for the criminalization of illegal money-exchange activities in or near casinos. The Monetary Authority of Macao should attach great importance to the above matter. According to lawyer Carlos Coelho, a potential solution to mitigate the problem is to allow the use of digital renminbi in casinos. The usage would take the intermediaries responsible for currency-exchange activities out of the picture.

Lei Wun-kong is a lawyer based in Macao and litigation and practice senior consultant of Chinese Dream Think Tank. 

Kacee Ting Wong is a barrister, part-time researcher of Shenzhen University Hong Kong and Macao Basic Law Research Center, chairman of Chinese Dream Think Tank.

The views do not necessarily reflect those of China Daily.