Discussions are rife in the world’s largest gaming hub, Macau, on a new law covering illegal gambling in the Chinese Special Administrative Region (SAR). The second standing committee of the Macau Legislative Assembly recently revealed that the law in question won’t be including legislation on the activities related to money exchange gang members.

That said, the legislators have still left the door open for criminalizing such activities in the future. The draft bill, under consideration, is set to replace the current Illegal Gambling Law (Law 8/96/m), and it is currently being reviewed at the Legislative Assembly.

Decision Somewhat Surprising Considering Mainland China’s Stance

The decision by the legislators to exclude language on illicit money exchange restrictions is somewhat surprising, considering mainland China’s tough stance on the growing problem of money exchange gangs in Macau. At the beginning of this month, public security authorities across mainland China launched a special deployment meant to crack down on crimes perpetuated by Macau’s Money Exchange Gang members. The overall concern from the authorities from mainland China is that the crimes perpetuated by these criminals will have a significant effect on the social security standing of the city.

To that effect, a meeting was convened on 27th May in Beijing. The convention, graced by the top public security honchos in China, focused on deploying work to combat and rectify criminal money exchange. In the aftermath of the meeting, a statement was released by the Ministry of Public Security of the People’s Republic of China (MPS). It read in part:

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 “In recent years, the scale of ‘Money Exchange Gang Members’ in Macau, which illegally provide individuals or organizations with large-value cash exchange and loan-sharking services, has been expanding rapidly, inducing fights, fraud, thefts, illegal immigration, and other crimes, and seriously affecting the stability of social security in Macau.”

The website statement further promised that stern action would be undertaken by the relevant authorities to crack down on underground money laundering and money laundering crimes. Additionally, the statement pointed out that the government is committed to allocating its best resources to identify the structures of the syndicates involved in these crimes and, accordingly, bringing them to book.

Macau’s money exchange gangs have been a thorn in the flesh of authorities for quite some time now. According to figures released by the police, the first quarter of this year has seen the number of fraud crimes from these gangs reach 149. This is an increase of 112 and 107 compared to the same period in 2023 and pre-Covid 2019, respectively.

Macau Government Insists That It Still Takes the Matter Seriously

As already noted, while the bill does not target the illicit exchange of funds, critical figures in the government still insist that this is a pertinent matter that the government will ultimately look to address. Chan Chak Mo, the Head of the Second Standing Committee of AL, spoke on the matter recently after a bill review meeting. According to Mr. Chan, local authorities have decried the occurrence of illegal money exchange activities in the local casinos and the surrounding tourism facilities. As a result, the development of the gaming industry and the economy continues to be deeply undermined.

Presently, crimes relating to unlawful currency exchange crimes in Macau are classified as crimes in the financial system. They are administrative offenses where one can get off with fines on most occasions. If foreigners commit these crimes, the Macau police have the mandate under law to repatriate them from the country. Subsequently, they are permanently barred from re-entering the government on the grounds of ‘engaging in activities that are incompatible with the status of a visitor.’

While all this showcases the seriousness the government takes this crime, Chan also explained that the government’s position on money exchange gang members is that they bear no relation to the Illegal gambling law. His statement read in part:

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“Illegal exchange of currency is a financial crime, which has not been a big problem in the past, but the number of money exchange gangs has increased in recent years, so a series of problems have been derived. But are the existing laws unable to deal with it? Is it that the financial laws cannot deal with it? The government believes this discussion is needed. The government has an open mind on this.”

While the options within the law, as we’ve just looked at, exist, Chan says that this practice isn’t in line with the current situation. According to him, the cost of repatriation of the foreigners found to have contravened this law is too low to be a deterrent for those who engage in such crimes. Instead, Chan calls for the criminalization of illegal currency exchange, which he feels will have a more significant effect moving forward.

Way Forward in the Interim

There has been a heated debate in Macau in the past concerning Chan’s recommendation to criminalize illegal currency exchange. In late 2023, the SAR’s Secretary for Security, Wong Sio Chak, indicated that the government was seriously considering criminalizing the unlawful exchange of funds.

Now that the second standing committee of the Legislative Assembly is deliberating the illegal gambling regulation, lawmakers have expressed a willingness to adopt amendments. After that, they will invite government officials over for a more in-depth discussion on the matter.