GGRAsia – Macau junkets may morph to Vegas style agents says scholar

Macau junkets may morph to Vegas style agents says scholar

Apr 01, 2022 Newsdesk Latest News, Macau, Top of the deck

Macau’s licensed promoters for VIP gambling, also known as junkets, are likely in future to be purely agents, introducing players to the city’s casinos, with those venues then managing such players directly, thinks a leading Macau gaming scholar.

Professor Wang Changbin, director of the Centre for Gaming and Tourism Studies at Macao Polytechnic University, told GGRAsia: “I think in the future, the VIP rooms would be directly run by the concessionaires, and the promoters in Macau would be like independent agents in Las Vegas.”

He was referring to the business model for high-roller play in that Nevada gambling hub in the United States. There, independent agents are non-casino people permitted to deal with casinos regarding the introduction of high-value players. Within the casino itself, what are termed casino hosts deal with high-value players.

The Macau scholar added, referring to recent enforcement action against some casino-player agents within the Chinese mainland, and to Macau’s own agent system: “Most of the promotion business would be likely to pull out of mainland China due to the crackdown there, and turn to other markets such as Hong Kong, and to outside countries.”

The Macau government is proposing to reshape the gaming regulatory framework as the city prepares for a fresh public tender for Macau gaming rights, associated with the anticipated expiry of the current six concessions this year.

There are two main elements to the regulatory update: an amendment bill relating to the existing gaming law, and a proposed new statute specifically to cover junket-based VIP gambling business. Previously, junket business had been mostly dealt with via administrative regulation.

Details of the proposed junket bill were disclosed to the Macau media on Thursday.

André Cheong Weng Chon, Macau’s Secretary for Administration and Justice, said in comments that day, the government was seeking to create new regulation for junkets via a fresh law, rather than via amendment to existing administrative regulations covering junkets, because the authorities wished to impose strong penalties for infringement.

Mr Cheong stated: “An administrative regulation is unable to deal with an administrative fine that involves more than MOP500,000 [US$62,000].”

Via a bill specifically to cover gaming promoters, Macau could “address regulatory issues related to – not only our junkets – but also other industry stakeholders, in a comprehensive manner,” added the official.

Liability concerns

Traditionally, the Macau junket system has also involved other “stakeholders” called sub-agents – known under Macau’s regulatory system as “collaborators”. They are typically people with a network of contacts, that have been able to introduce high-value players so the junkets could then host them in a casino VIP room.

The issue of liability regarding the conduct of sub-agents has been in the news recently.

Veteran local legislator Chan Chak Mo, who heads a committee of the city’s Legislative Assembly tasked with scrutinising the gaming law amendment bill, said recently that a provision whereby casino operators would in the future be jointly liable with the junkets, for the conduct of the sub-agents, was among the main concerns for the city’s gaming operators.

Macau’s Judiciary police said in a Wednesday briefing, that as much as HKD280 million (US$35.8 million) in cash might have been lost between an aggregate of more than 200 deposit holders, after a sub-agent working with the Macau gambling junket system allegedly failed to return money when requested by some depositors.

Ricardo Siu, associate professor in business economics at the University of Macau, told GGRAsia that – given the casino sector in general was what he termed a “socially-controversial industry” around the world – it was, in the Macau context, “the responsibility of a casino concessionaire to take the initiative to ensure the integrity of its business”.

He added that if a concessionaire used a “gaming agent” to promote its business, it had to “ensure that this agent is following all the regulations strictly”.

Prof. Siu added: “If the gaming agent wants to work with other ‘collaborators’, the concessionaire must also know who are those ‘collaborators’ in order to ensure that they are appropriate to prompt its business.”