Introduction

Following the end of Macau’s gaming industry monopoly,
dealer-operated electronic table games (DETGs) have assumed an important and
decisive role in the Macau gaming market. Until recently, no technical
standards covered the hardware and software of these particular gaming
products.

Considering the development and increasing importance
of this type of gaming product, the Macau Gaming Inspection and Coordination
Bureau decided that it was necessary to advance a new set of “credible
technical standards for DETG”.

On December 6 2017, following the issuance of the
technical standards, the bureau published Instruction 1/2017 on DETG Technical
Standards Version 1.0 (the guidelines). The main purpose of the guidelines is
to unify the technical requirements for bureau approval of DETGs. The relevant
test reports and certificates must be in accordance with the guidelines’ aim of
improving “fairness, transparency, so as to enhance the positive image of
the gaming industry in Macau”.

Guidelines

Commencement, effectiveness and
enforcement
The commencement date of the guidelines is January 1 2018, but the
effectiveness date has been postponed to June 30 2018 in order to allow
manufacturers to implement the new standards imposed under the guidelines (the
grace period).

After July 1 2018, all DETGs with an approval process
which has been submitted to the bureau will be tested and certified by an
authorised laboratory.(1) DETGs that do not
comply with the technical standards by 12:00pm on December 31 2019 must be
disconnected and permanently withdrawn from operation.

Grace period operation
During the grace period, the bureau will accept applications for approval of
DETGs that are compliant with the guidelines or GLI25 dealer-controlled
electronic table games.

All DETGs approved at the commencement date but
upgraded with any hardware or software which materially changes(2) the operation,
fairness, security, reliability or auditability of the product will be treated
as a new application (ie, requiring new approval). In such a case, the upgraded
product must fully comply with the guidelines.

Grandfather period operation
The guidelines set out a grandfather period from July 1 2018 and December 31
2019 (inclusive). During this period all gaming concessionaires (or
sub-concessionaires) must submit so-called ‘updating reports’ detailing their
developments to withdraw from operation or convert DETGs to fully comply with
the guidelines. The updating reports should be filed with the bureau no more
than 30 days after the end of each six-month period, commencing on June 30
2018.

The updating reports should advise on the total number
of DETGs which:

• have been withdrawn permanently from operation or
  have been converted to become fully compliant during the relevant period;
• have been withdrawn from operation during the
  grandfather period; and
• are non-compliant at the reporting date.

Each updating report must also contain an itemised
schedule with serial numbers of all withdrawn or converted DETGs.

Gaming concessionaires (or sub-concessionaires) must
use their best efforts to achieve at least a 40% conversion rate by 12:00pm on
December 31 2018.

The grandfather period will not be extended.

Comment

The technical standards recently disclosed by Macau’s
gaming regulator assume a double importance for local gaming industry. First,
the technical standards have bridged a gap in the existing legal framework,
helping to mitigate uncertainty about the operation and legal processing of
this sort of hardware and software within the gaming industry which is relevant
to stakeholders, gaming operators, manufactures and clients. Second, the
technical standards have contributed to the standardisation of these two
different generations of electronic gaming machines and their respective
software’s technical standards, confirming the regulator commitment to
implement the best international industry practices in Macau.

For further information on this topic please contact Pedro Cortés or Óscar
Alberto Madureira at
Rato, Ling, Lei & Cortés Advogados by telephone (+853 2856 2322) or email (cortes@lektou.com or madureira@lektou.com). The Rato,
Ling, Lei & Cortés Advogados website can be accessed at www.lektou.com.

(1) According
to Instruction 1/2017, Annex I, the authorised laboratories include:

• BMM International Pty Ltd;
• Gaming Laboratories International;
• Technical Systems Testing;
• Enex TestLab;
• Slovenia Institutes of Quality and Metrology;
• QALab Pty Ltd; and
• Eclipse Compliance Testing.

(2) Material
changes (if any) will be considered on a binding basis by the bureau following
any submissions made by authorised electronic gaming machines manufacturers.