Civil servants advising the Japanese government on the introduction of casino resorts to that country have recommended that junkets should not be allowed, GGRAsia has learned. Precisely how they defined the meaning of “junket” has not so far emerged.
The Office of Integrated Resort Regime Promotion – known as the IR Promotion Secretariat, made up of professional civil servants advising the government on the IR (Integrated Resorts) Implementation Bill – made the recommendation to a meeting of experts this week. It is expected the implementation statute will set out regulatory specifics of Japan’s nascent casino industry, and will be a key step in the process of bringing casinos to the Asian nation.
The news of the full-time officials’ viewpoint emerged after a fourth-round meeting of an eight-strong panel of experts advising the IR Promotion Secretariat. The expert panel was chaired by Professor Hirotaka Yamauchi of Tokyo’s Hitotsubashi University.
No details of the reasoning in reaching a view on possible exclusion of junkets have so far emerged, according to GGRAsia’s correspondent, although the issues of the financial role of junkets in casino business, including the issuing and collection of credit for gambling, were mentioned.
It is also not clear from the details that have emerged, whether Japan might consider a player agent system similar to that used in Singapore.
The Secretariat was said to have placed importance on the Nevada and Singapore regulatory regimes and stressed the wish to introduce the highest standards of regulation, according to our correspondent.
Macau vs Singapore
Junkets are typically understood in the casino industry context to be third parties that bring high-value gamblers to casinos. But only in some markets – such as Macau – are junkets themselves licensed to organise the issuing of credit for high stakes play, and the collection of money from any credit-fuelled gambling losses incurred by the players.
In Singapore, the city-state’s Casino Control Act says a casino operator may provide gambling chips on credit to a person if they are: neither a citizen of Singapore nor a permanent resident of Singapore; a premium player; or what are called locally a licensed international market agent – “for the performance of his functions as an international market agent”.
Anyone seeking to be licensed as such an agent in the Singapore market must undergo extensive vetting. When the Casino Regulatory Authority (CRA) issued its first such agent licences in 2012, it announced 12 of the 14 initial applications had been rejected. Under Singapore’s regulatory regime for international market agents they are not allowed to share commission with anyone who is not a licensed agent, according to the CRA’s website.
Currently, also according to the CRA’s website, two international market agents are licensed for the Singapore market, in each instance to provide services at the Resorts World Sentosa casino complex, operated by Genting Singapore Plc. In Macau, there were 126 licensed VIP gaming promoters as of January 2017.
Other topics that emerged in Tuesday’s meeting of experts on Japan’s casino liberalisation process included the possibility that any sale of casino chips via personal credit card would be restricted to foreign customers, and that automated teller machines (ATMs) for cash withdrawals would in likelihood be banned from casino floors. It was also recommended that ATMs placed near – but not on – the gaming floor should not have the capability to issue cash on credit. ATMs placed in the resort, but “far” from the casino space would be able to offer cash on credit, it was suggested. No details have emerged of what might be considered a suitable distance from the casino for such ATMs.
The Secretariat also recommended – and the panel of experts raised no objection to the idea – that wagering on sports events and via online gaming should be banned in Japan integrated resorts.
On June 5, a senior member of a lawmaker grouping called the IR Diet Members Association indicated that the IR Implementation Bill might be tabled at this autumn’s extraordinary session of the Japanese parliament.
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"Most investors believe that Macau is ‘uninvestable’. Our experience has been that when opinions are so unanimously negative, then the risk/reward is skewed to the upside"
Japanese brokerage Nomura