Macau’s VIP gaming sector representatives discussed at Macao Gaming Show 2016 hopes of setting up and operating a centralised credit database by January 1 in 2017; as well as the implications for the industry of the reported detentions in mainland China of individuals linked to Australian casino operator Crown Resorts Ltd.
During a Wednesday conference panel at the casino industry trade show, Kwok Chi Chung, president of the Association of Gaming and Entertainment Promoters, said his body hoped to have a central credit database – capable of keeping track of the gambling credit issued to individual players by the junket sector – running by the new calendar year.
VIP promoters have previously told GGRAsia that in the past, junkets – fearful of their high value players being poached by rival VIP rooms – would not necessarily share intelligence on who had been loaned money and the amounts involved. On occasions, this led to large amounts of credit being issued to individuals; some of whom failed to repay money owed on gambling losses.
During the conference session, Mr Kwok said use of the proposed database would be restricted to junkets that were members of the association.
“We have the content of our markers [credit notes] approved by the government, whereby we’ll add a disclaimer stating that the borrower has to agree to have his or her credit history saved in our database. This database is only meant for our members’ reference,” Mr Kwok said. “This does fit the personal data protection practice [of Macau]. The Office for Personal Data Protection has also given us many directives [on the use of such a database].”
“We’ve had discussion with legal counsel on it [the database], and that the operation procedure and whole system does abide by local law,” Mr Kwok noted during the panel. “Now we have our IT [information technology] company that has set up the system: it is now being tested and connected to the junkets here.”
The main purpose of the database was to identify people with bad debts relating to VIP gambling credit, Mr Kwok said.
When asked if the planned centralised database on credit issuance would be connected to other credit information companies outside Macau, Mr Kwok stated: “We’re still studying if our system can be linked to those in other places, though it may involve some legal difficulties. But we hope that we can do this.”
Macau junket investor U Io Hung, Mr Kwok and Charlie Choi Kei Ian, president of another junket sector trade grouping called the Macau Gaming Information Association, all stated during the panel that they believed the revenue of the VIP gaming business in Macau is stabilising after more than two years of retreat.
The three panelists also welcomed the more stringent requirements mentioned by the Macau government regarding the financial strength of junkets operating in the city, and the enhanced checks on the background of those involved in junkets. The panellists said they thought such initiatives would be positive for the VIP sector, which according to the most recent Macau government data, still supplies more than half of all casino gross gaming revenue in the city.
When asked if some recent cooling measures applied to the mainland China property market by the central government in Beijing would in any way affect the debt collection of junket operators, Mr U remarked: “The collection [of debt] is always difficult. But we have people to arrange for the players to pledge their property as collateral before they gamble, in aim of reducing our credit risk.”
Liquidation of property assets is a common way for Chinese high roller players to pay off gambling debts to casino junkets, according to investment analysts covering the gaming industry.
Mr U, the chairman of Macau VIP clubs branded “CCUE” operating at Altira Macau and the Venetian Macao, reminded the panel audience that organising groups of Chinese citizens to gamble overseas is a crime punishable by imprisonment in mainland China.
On the sidelines of the panel he also gave some commentary to the media regarding the recent reported detention in mainland China of some employees of Australian casino operator Crown Resorts.
“I think they [Crown Resorts] have been too aggressive [in attracting gamblers to play abroad]. To lure Chinese to gamble abroad is already illegal [on the mainland], and they have a large team there with huge capital involved there,” Mr U said.
The VIP gaming investor added that Macau junkets still have marketing staff working in mainland China, but usually conduct their business in a subtle way. Some of the junket representatives would continue to do their marketing work on the mainland by offering travel-related services.
Referring to the number of Crown Resorts employees reportedly caught up in enforcement action, Mr U said: “In our case, we didn’t really deploy a big team like 18 people there [in mainland China], but only one or two… you shouldn’t show your VIP gaming promoting business card, but other types of cards, and say that you can offer accommodation, dining and entertainment. You should never do anything large-scale [in mainland China],” Mr U said.
“You can provide your marketing services as a travel agency [on the mainland], and this has been the practice. But Crown did not do it in this fashion,” Mr U added, noting that he believed the reported detention of the Crown Resorts-linked individuals might have come about if that firm’s representatives had directly discussed the issuance of gaming credit to potential high rollers as well as transport arrangements.
But Mr U told the media he did not believe the Crown Resorts incident would impose a long-lasting negative impact on the VIP gaming promoters that are engaged in attracting Chinese gamblers to play overseas.
“Of course people would expect now certain negative impact… including the fact that China will do more stringent checks against money laundering or taxation evasion,” Mr U said. “But in a few months’ time, this case will be forgotten,” he added.
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