Inside Asian Gaming

INSIDE ASIAN GAMING | June 2008 and managers of the casino venues and facilities,” adds Mr Ramirez. Macau’s government has now woken up to this threat and is talking about putting a cap on the commissions paid to junkets. To be fair to Macau, it’s also come a long way from the monopoly days when VIP operators were effectively unregulated. An alternative to capping junket commissions might be to offer a reduction in gaming tax on the VIP gross, though this would have the effect of strengthening the position not only of the casino operators but also the agents— and all at a cost to the public purse. Macau’s until now laissez faire position on junkets contrasts sharply with that of Singapore, where casinos were recently le- galized and two sprawling casino-centred integrated resorts are set to open by 2010. Here’s what Wong Kan Seng, Singa- pore’s Minister of Home Affairs told the country’s parliament when introducing the Casino Control Bill 2006 in February that year: “Organising junkets is a specia- lised and highly lucrative business that is important to the casinos’ viability. “Because of the large sums of money transacted between the junket promot- ers, their clients and the casinos, it is im- portant that junket promoters are well- regulated to ensure that the junkets do not provide a cover for crime syndicates to engage in criminal activities, such as money laundering. For this reason, Sec- tion 110 of the Bill shall require junket operators to be licensed before they can work with our casinos.” Burden of proof Not only does Section 110 of the Sin- gapore act emphasise the need to prevent financial irregularity among junkets, it also puts a specific burden of responsibility on the agents to prove they are operating an acceptable business model. According to industry sources who spoke to IAG , in the Macau market, an agreement between an agent and casino operator is subject to review by Macau’s gaming regulator, but prior vetting is not normally required. In Singapore, plans for such agreements must be cleared first by the Casino Regula- tory Authority. Rule breakers can face fines and prison terms. The Singapore law explicitly states:“In particular, the regulations may: (e) require any contract or other agree- ment that relates to the conduct of a jun- ket to be in a form and containing provi- sions approved by the [Casino Regulatory] Authority; (f) require the junket promoter or the casino operator concerned to give speci- fied information concerning the conduct of the junket to participants in the junket; (g) require the junket promoter or the casino operator concerned to give the Au- thority advance notice of any arrangement for premium players and to furnish to the Authority specified information concern- ing the arrangement; (h) regulate the conduct of licensed junket promoters and prescribe the disci- plinary actions, including a financial penal- ty not exceeding S$400,000, against any li- censed junket promoter who contravenes any provision of the regulations; and (i) provide that any contravention of any provision of the regulations shall be an of- fence punishable with a fine not exceeding $100,000 or with imprisonment for a term not exceeding 12 months or with both.” Macau-style Macau’s Administrative Regulation 6/2002 controlling junket agents was origi- nally drafted in Portuguese,and to the best of IAG ’s knowledge, it has never been fully translated into English. Brief transcripts in English refer to the need for “constant supervision by the DICJ” and a “duty of cooperation” on the part of junket licence applicants. Some of these differences in substan- tive legal approach may be due to cultural factors rather than a lack of desire byMacau for robust regulation. Singapore’s penchant for clearly stated rules prominently and publicly advertised may be linked to its le- gal system based on English common law. That system tends to focus on permission and prohibition,with the efficacy of the law then tested in live legal cases. Macau’s legal structure, on the other hand, is inherited from Portugal and is based on the continental or Roman sys- tem, which puts more emphasis on gener- al codified principles and normally marks out clear areas of competency for politi- cians and judges respectively in applying the law and adjudicating upon it. In Macau, there are also indications of a distinctively Chinese pattern of adminis- trative practice. Under this informal system, rules are set out, but over time, custom and practice may allow for a more permissive interpretation until someone either pushes things too far or social or political pressures lead to a tightening of the rules.An example of this is what happenedwhen Guangdong, the Chinese province next door to Macau, decided to reduce the flow of entry permits to Macau for a few weeks last year.The per- mit rules didn’t change, just the approach to administering them. The difficulty with this system is that it pretty much amounts to the same thing as rule by decree. Unlike the clear and proactive statement on regu- lation of junkets, by Singapore’s Mr Wong, Macau’s regulatory system appears to be essentially a reactive one,responding to ex- ternal events or pressures. Cover Story Macau Junkets vs. Singapore Junkets Singapore Bay Theatre Outside the Grand Lisboa 8