GGRAsia – Macau should weed out smaller junkets: U.S. govt

Macau should weed out smaller junkets: U.S. govt

Apr 16, 2018 Newsdesk Latest News, Macau, Top of the deck

The United States Department of State says Macau should further strengthen the city’s gaming industry by reducing the number of smaller junket operators in the market and enhancing anti-money laundering controls.

“The [Macau] government should continue to strengthen interagency coordination to prevent money laundering in the gaming industry,” said the 2018 edition of the U.S. Department of State’s International Narcotics Control Strategy Report.

The report stated the Macau government should “encourage smaller junket operators, who have weaker anti-money laundering controls, to exit the market while encouraging the professional junket operators to continue to develop their compliance programmes”.

The Macau government plans to introduce greater oversight of junket operators, via fresh legislation and updated regulation.

Paulo Martins Chan, director of Macau’s Gaming Inspection and Coordination Bureau, indicated in December that the Macau government would amend the regulations on casino junket operators. He also said at the time that the legislation process would “definitely” start in 2018.

In an emailed reply to GGRAsia earlier this month, the gaming regulator revealed some of the topics being discussed in meetings with junket industry representatives in this respect. They included an increase in “market entry requirement for the junket promotion business”; an increase in “the amount of shareholding held by Macau residents” in such companies; and ways of tackling “unlawful deposits related to a junket promoter or under the name of a junket promoter”.

Data published in January by Macau’s gaming regulator showed there were 109 licensed junkets in the market, a 13.5-percent fall from the 126 operating in January 2017. The year-on-year shrinkage in the sector marked the fifth consecutive year this has happened. In January 2013, Macau had a total of 235 licensed junkets, according to official data.

Brokerage JP Morgan Securities (Asia Pacific) Ltd had said in a note in May last year that what it termed some “mid-sized” junkets seemed to have been gaining market share in the Macau market. But it added “sustainability is something to be mindful of … as smaller junkets tend to carry higher credit/collection risks given their relatively loose credit policy,” compared to the bigger gaming promoters.