MACAU BUSINESS
“Before the handover [in 1999], local junket operators
pointing out that local laws do not require gaming concessionaires and sub-concessionaires to have junket VIP rooms. Another official, Secretary for Economy and Finance Lei Wai Nong, also commented in late December that local junket operators could continue to operate should they abide by Macau regulations and respect the rules of other jurisdictions. A revision of the criminal law in Mainland China, which
has come into force since March 2021, has been regarded as a game-changer from the perspective of industry observers. The latest amendments create a new offence for any individuals who “organise” trips for the mainlanders to participate in gambling activities abroad, as well as bolstering the penalties like a prison term between five and 10 years (For more details, see another story about an academic paper written by a mainland legal scholar-cum- prosecutor).
Turmoil years in the making
Though the collapse of the junket system has only accelerated in the past few weeks, the beginning of the clampdown on the segment could date back to more than a few years ago. Since the mainland introduced an anti-corruption drive and strengthened efforts in reining in the capital outflows from the country, coupled with heightened oversight throughout the years, the junket segment has steadily shrunk. The number of licensed individual and corporate junkets totaled only 85 in early 2021, decreasing by 10 from the previous year and extending the annual decline to the eighth consecutive year from 2013, when a total of 235 gaming promoters were recorded, the DICJ data showed. And the recent series of incidents make one wonder whether the local junket system, first created in the 1980s during the gaming monopoly held by the late tycoon Stanley Ho Hung Sun, still has a future here. In the views of Davis Fong Ka Chio, local junkets have to adjust their business model.
used to fetch high rollers from Japan, Malaysia, Thailand and other Southeast Asian nations to gamble in Macau,” the Director of Institute for the Study of Commercial Gaming at the University of Macau (UM) says. “In face of the changes [in the mainland] now, they could target the Southeast Asian market again, as well as the nearby Hong Kong market.” A former legislator, Mr. Fong does not think VIP rooms will become extinct in Macau over the recent changes, as the gaming industry has to provide different offerings to different segments of patrons. “The VIP rooms directly managed by gaming operators themselves will at least continue,” he adds.
Singaporean-style
Another scholar from UM, Ricardo Chi Sen Siu, believes that the local junket system could go on but that an overhaul is needed. The associate professor of business economics with research interests in gaming and tourism says the system going forward might mirror the International Market Agent (IMA) system in Singapore, in which the agents could also organise trips for high-rollers to play at casinos and extend them credit in exchange for a commission but they are more heavily regulated and vetted than junket operators in Macau. “They would simply become gaming [marketing] agents that bring in patrons for casinos rather than being involved in running VIP rooms,” he adds.
“In the face of the changes [in the mainland] now, [junket operators] could target the Southeast Asian market again, as well as the nearby Hong Kong market,” says gaming scholar Davis Fong
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