Macau’s casino regulator the Gaming Inspection and Coordination Bureau – a body also known by its Portuguese acronym DICJ – has banned the city’s junket operators from using Macau as a base for cross-border settlement of VIP gambling services provided elsewhere, GGRAsia learnt from industry sources.
The sources added that a new directive on the matter issued by the gaming regulator – but not made publicly available – came into effect on August 1.
Four different VIP gaming industry sources, who asked not to be named, told GGRAsia that, up until August 1, junkets with operations in Macau and in other jurisdictions, used to provide betting settlement services in Macau for their high-roller clients, for play in overseas markets.
The sources explained that such services allowed high-rollers – particularly those coming from mainland China – to use the Macau operations of a junket operator to deposit their funds for gambling. The concerned junket operator would then make these funds available to the player at other VIP gaming venues outside Macau, for gambling purposes; the settlement of eventual winnings or losses would again take place in Macau.
Such operating model is now banned, according to DICJ’s directive, the sources said.
The new rules were communicated to the industry via an official document issued in July, the sources told GGRAsia.
GGRAsia approached DICJ for comment on the matter, but did not receive a reply by the time this story went online.
Bloomberg reported on Thursday – citing anonymous sources – that a ban on Macau junket operators using the city as a “settling platform” for gambling services provided elsewhere had come into effect on August 1.
Macau is the only place in China where casino gambling is legal.
The new rules in Macau on cross-border settlement of VIP gambling services come as authorities in mainland China are increasing enforcement against cross-border gambling activities targeting Chinese nationals. Efforts have included a crack down on “underground banks” and other informal platforms in mainland China, used for cross-border settlement of gambling-related expenses.
According to a statement from the Chinese embassy in the Philippines published on Thursday, mainland Chinese authorities had pledged to “destroy networks of criminal organisations involved in recruiting gamblers from China by overseas casinos and using the Internet to open casinos in China”.
Brokerage Sanford C. Bernstein said in a Friday memo the gesture by the Chinese embassy in the Philippines “could be seen as a warning to junkets and online gaming operators about gaming activities outside of Macau.”
It added: “If the warning is not heeded by the offshore operators, then China will likely begin a broader crackdown, which would be negative for POGOs [Philippine Offshore Gaming Operators] and Philippine casinos.”
The new rules in Macau on cross-border settlement of VIP gambling services come just a few weeks after Chinese state-backed media alleged that Macau-based junket operator Suncity Group had been involved in operating an online gaming platform for play outside Macau, targeting high-rollers from mainland China. Suncity Group publicly denied the online gaming allegations, adding 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”.
In a later email to GGRAsia, Suncity Group said it had “stopped overseas telebetting as promised.”
Telebetting is a practice whereby an agent or third party – usually a junket representative – makes a bet in person on a VIP room table game, on behalf of a client ordering the wager via a mobile online device or telephone. Such practice was banned by the Macau government in 2016, and has since become popular in the Philippine casino market, namely serving players in mainland China, according to investment analysts covering the gaming sector.
Suncity Group runs 18 VIP gaming clubs in Macau. Outside Macau, the group runs 14 high-roller gambling clubs, namely in the Philippines, Vietnam, Cambodia, South Korea and Australia, according to information previously disclosed by the company.
At the time, the bureau also reiterated that any violations of local laws, or even of regulations in places outside Macau, could potentially affect the suitability of a junket promoter in Macau, understood to be a reference to whether it would be in good standing with the local authorities. Gaming promoters in Macau VIP rooms require a licence from the city’s government in order to operate.
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Aggregate number of visitor arrivals to Macau in October