Fresh crackdowns – reported in the mainland China media – on China marketing agent networks said to feed VIP players to casinos in South Korea, were evidence that “Macau’s loss is no one’s gain”, said a note on Monday from brokerage Sanford C. Bernstein Ltd.
The institution was referring to the recent crackdown on corruption in mainland China that is perceived to have had a knock-on effect in particular on the Macau VIP and premium mass gambling markets, as wealthy players seek to avoid drawing the sort of attention that can come from dropping large amounts of cash at the gambling tables. A number of investment analysts have noted that a decline in Macau’s VIP gambling fortunes has coincided with an improvement in rolling volumes at casinos in neighbouring jurisdictions, including Manila in the Philippines and in South Korea.
But in May, Tom Arasi, president and chief operating officer of Philippine casino operator Bloomberry Resorts Corp, said the ongoing slump in casino gaming revenue in Macau was not good news for other Asian gaming jurisdictions.
Sanford Bernstein senior analyst Vitaly Umansky and his colleagues Simon Zhang and Bo Wen said in their Monday note: “While regional markets may have some regulatory arbitrage opportunities against Macau (e.g. lower tax rate, more lenient gaming regulation and AML [anti-money laundering] requirement), over the medium-term, we believe that Macau and China authorities may exert pressure on junket operations that aim to lure gamblers into the regional markets.”
The brokerage referred in its note to a report at the weekend from China News Service, an official mainland news agency, that police departments in Jiangsu, Shanghai, Hebei and Beijing had conducted “crackdowns” on some agent networks in China that promote gambling trips to South Korean casinos and that make commissions based on a percentage of gambling win or percentage of the amount wagered.
China News Service reported that the mainland’s Ministry of Public Security had started an operation called “Chain Break” – said to be aimed at disrupting foreign casinos’ access to money flows from China and those casinos’ links to individuals that scout for gamblers from China.
“The gambling money involved in the ‘Chain Break’ operation is said to be over RMB6 billion (approximately US$1 billion). We believe that the operation is targeting foreign (i.e., non-Macau) casino activities,” stated Sanford Bernstein.
The brokerage had mentioned in a note in June – quoting Chinese media – that 14 South Korean direct marketers in China were arrested by Beijing police for allegedly promoting South Korean casinos to Chinese citizens.
“Further, we believe the Chinese government’s crackdown also targets tour agencies that help gamblers apply for foreign visas,” said Sanford Bernstein in its Monday note.
In February, Bloomberg News quoted Hua Jingfeng, a deputy director at China’s Ministry of Public Security, saying that the authorities would be targeting casino operators from neighbouring countries that had set up offices in China “to attract and recruit Chinese citizens” to gamble abroad.
The Korea Times newspaper reported on Monday – quoting a South Korean Ministry of Culture, Sports and Tourism official that it didn’t name – that the government there would announce in December the winning applications for two new South Korean casino licences that it has put out to tender.
Several international casino operators are said to be among 34 companies that have expressed interest in the licences. The Korea Times quoted unidentified analysts as saying the ministry would likely issue one licence for an “integrated resort” in Incheon, the location of the country’s main international airport, and one to run a casino and other leisure facilities in “areas next to Seoul,” the country’s capital.
Sep 28, 2020A senior executive at China’s Internet-search provider Baidu Inc, has been detained by police in the mainland city of Hangzhou, in connection with an inquiry into alleged promotion of gambling...
Sep 28, 2020
Sep 28, 2020
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