Even if the Suncity junket brand stopped so-called “proxy betting” operations at casinos outside Macau – following claims in Chinese state-backed media that the brand was linked to “online gambling” – it would not necessarily benefit the casino sector in Macau, says a Tuesday note from Goldman Sachs (Asia) LLC.
In a Saturday press conference the boss of the Suncity brand, Alvin Chau Cheok Wa, had said in a prepared statement that even if certain “products” were “legally allowed to operate in other countries and regions, the company will not adopt them if the laws of Macau do not allow it”.
Proxy betting can offer players a casino gambling experience without actually being present in a bricks and mortar establishment, thanks to use of “proxies” – people that are actually on site – placing bets on their behalf via telephone or online communication.
Goldman Sachs stated in its Tuesday memo: “We do not believe stopping proxy betting in the Philippines or Cambodia would necessarily result in gaming volume being repatriated back to Macau.”
“Some of these [Chinese] players who participate in proxy betting in the overseas markets may have difficulty securing visas to travel abroad – whether it is Macau” or other jurisdictions, the institution noted.
Macau ‘55pct’ of Asia GGR
Goldman Sachs said – quoting proprietary research – that Macau would “continue capturing 55 percent of Asia total GGR [gross gaming revenue] in 2019.” It estimated such regional GGR would be about US$66 billion.
The institution did suggest nonetheless that “34 percent” – or as much as HKD78.2 billion (US$10 billion) – of the Suncity brand’s estimated monthly global rolling chip volume of up to HKD230 billion was being generated from its VIP gaming rooms outside of Macau. “Close to half” of the overseas rolling volume was coming from the Philippines and the rest from Cambodia, Vietnam, Australia and South Korea, the banking group suggested.
Goldman Sachs noted: “Per historical information, proxy betting has been in existence in Philippines since 2014. It has become more popular after Macau banned proxy betting in 2016.”
The financial institution further stated, referring to the Philippine casino regulator, the Philippine Amusement and Gaming Corp: “Pagcor, allows up to 25 percent of VIP gaming tables equipped with video streaming facilities. While we are uncertain whether the other junkets or casinos in Philippines would stop proxy betting similar to Macau, if they were to do so, our analysis suggests that this could have an impact on Philippines’ VIP GGR which contributes to 37 percent of overall [local casino] GGR but only 15 percent of EBITDA [earnings before interest, taxation, depreciation and amortisation].”
Goldman Sachs added: “If we assume 20 to 30 percent of Philippines’ VIP GGR is related to proxy betting – in line with our checks with industry participants,” and if all that play was cut out of the market, “our calculations show it could cut industry EBITDA in the Philippines by 3 to 5 percent.”
Macau online clampdown
Paulo Martins Chan, head of Macau’s regulator, the Gaming Inspection and Coordination Bureau, said on the sidelines of a public event on Tuesday – as quoted by local media – that the authorities had for some time been stepping up their efforts against illegal online gaming aimed at visitors to the city.
He stated: “For the first time, we have begun sending out mobile phone texts to travellers here not to access online gaming websites, which have never been authorised by the Macau government, and could very possibly be a scam,” as well as being unlawful locally.
He added: “We have always been campaigning against it [illicit online gaming], and in May we did a rather large-scale campaign.”
Mr Chan also quoted statistics suggesting that between 2016 and 2018, the gaming bureau – a body also known as DICJ – had identified “more than 500 illicit gaming websites”, and had communicated with the respective website hosts in order to have the sites taken down, resulting in what he termed the “shelving” of about 300 of them.
The gaming bureau further noted that since 2018, it had been referring cases of such activity to the city’s Judiciary Police.
Last week after the mainland media allegations that Suncity players were being recruited for an app that would allow them to bet online outside Macau, GGRAsia approached the city’s six operators, asking them how they could be sure that such things would not be possible in future in third-party promoted VIP rooms.
Only MGM China Holdings Ltd and Sands China Ltd had replied to us as of Tuesday this week, saying that such activities were not allowed in their respective properties.
The latter firm told us: “Sands China operates its gaming areas under a strict compliance and regulatory environment, observing all applicable anti-money laundering laws and preventive measures, and in line with our regulators’ instructions, both in Macau and elsewhere.”
It added: “As such, online betting, phone betting and proxy betting at Sands China properties, including through any of the gaming promoters licensed to operate therein, are strictly not permitted.”
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Vitaly Umansky, Eunice Lee and Kelsey Zhu
Sanford Bernstein analysts