Chinese law change could prompt junket shake up
Asian casino junket operators could find themselves in hot water if China’s proposed gambling punishments come into effect.
Calvin Ayre reports that China’s state-run media reported plans by the Chinese Standing Committee of the National People’s Congress to amend the nation’s gambling laws to criminalise the “organising and soliciting by casinos abroad”, with as-yet-unspecified punishments for individuals or entities that attempt to lure mainland gamblers.
While the consensus is that the amendment won’t apply to casinos in Macau, a special administrative region of China, it would undoubtedly apply to casino or gambling operators based in the Philippines, South Korea, Vietnam, Australia and other regional gaming hotbeds.
It would put further pressure on the region’s junket operators, many of which spent the past few years redirecting their VIP gaming customers to casinos outside Macau that offered more favourable gaming tax rates, which meant greater commission for junkets.
Macau’s government recently revealed that it collected around US$50 million in taxes on commissions paid to junkets by local casino operators last year, down nearly one-quarter from 2018.
The sum also represented only around 83 per cent of the government’s original junket tax target for 2019.
The number of Macau-licenced junkets has been declining for six straight years, with just 95 operators still on the books at the end of last year.
In addition to a quest for more lucrative markets, junkets are leery of Macau’s plans for increased junket oversight to ensure tighter control over the local VIP gambling market.
On Wednesday, Sanford C Bernstein analysts called China’s proposed amendment an extension of efforts to “limit gambling in foreign countries and reducing associated money outflows to other countries.”
Many of these countries’ casino markets rely heavily on junket-based activity, but the analysts suggested Macau’s market would likely see a shift to more premium mass and ‘direct’ VIP business rather than a junket surge.
On Wednesday, GGR Asia quoted junket investor Luiz Lam Kai Kuong saying China’s plans were “definitely not good news” for Macau’s junkets.
Lam said some mainland VIPs had been “warned by Chinese authorities about their gambling activities”, wiel junkets who dealt with these VIPs had faced “punitive” actions by Chinese authorities.
Lam also forecast Macau’s number of junkets could drop to just 80 by the end of 2020.
Junket partner causes concern among Crown staff
Employees working for Crown Resorts in Macau said they feared one of the casino’s junket partners, who was linked to a drug syndicate.
The Brisbane Times reported in September that Crown’s chief legal officer Joshua Preston told the ongoing New South Wales Independent Liquor and Gaming Authority’s inquiry that Crown appears to have been linked to some “unsavoury characters” through its partnership with Ng Chi Un, who operated the “Hot Pot junket” until 2015.
The government inquiry is examining Crown’s fitness to hold a casino licence in the state.
Reports reveal the Hot Pot junket was linked to an international drug trafficking syndicate, known as The Company, and arranged for members of the gang to visit Crown’s Perth Casino in 2015.
When they did, they turned over $800 million in the course of a few days.
Crown rejected the reports as being “unsubstantiated” and part of a “deceitful campaign” against the company.
Mr Preston told the inquiry he made inquiries in the past month into Mr Ng and what a senior member of Crown’s international VIP division, Ari Lee, meant when he described Mr Ng in a 2015 email as a “very influential character” in Macau, regarding its “underground network.”
Mr Preston said Mr Lee did not explain what the “underground network” was, but did tell him that Crown staff in Macau raised concerns about Mr Ng and his associates because they may have been “unsavoury types”.
“They had concerns that if a cheque was going to be banked and if it bounced, they would be potentially concerned about some harassment,” Mr Preston said.