Inside Asian Gaming

May 2016 inside asian gaming 75 Revenue from VIP baccarat, the segment in which junkets almost exclusively operate, fell by 40% in Macau in 2015, and 19% year-on-year in the first quarter of this year. Last year the city’s casino regulator, the Gaming Inspection and Coordination Bureau (DICJ), introduced tighter accounting rules for the sector following a series of thefts by employees, and in January it said the number of registered junkets had fallen by 23% in a year. On April 27 the DICJ said it was auditing junket statements to assess the amount of bad debt in the industry. Junket trade associations want their members to be able to share information on players with bad debts, although moves to create a blacklist have in the past come into conflict with privacy laws. A recent report by Daiwa Securities said most of Macau’s gaming promoters are now “struggling to break even.” Many shut down VIP rooms last year. Some are shifting their business to Southeast Asian jurisdictions, including Cambodia, the Philippines and Vietnam. AML should cover Philippine casinos – World Bank The World Bank called on the Philippines to include casinos in anti-money laundering legislation. “Reforms should be made, for instance, in making sure that casinos are included … Loopholes must be closed,” World Bank lead economist Rogier van den Brink told reporters in Manila. He added that although the enactment of the anti-money laundering law in 2001 was a good start, the Philippines must “keep reforming it so that you are sure these untoward effects will not materialize.” REGIONAL BRIEFS Van den Brink was referring to how two Manila casinos were recently used to launder money stolen in one of history’s largest cyber heists. In February hackers used stolen codes to transfer US$81 million from a Bangladesh Central Bank account at the New York Federal Reserve to four fake accounts in the Philippine capital, and then buy chips at Midas Hotel and Casino and Solaire Resort and Casino. A Philippine Senate hearing named two Macau-based junket operators as recipients of some of the money, most of which is still missing. Lawmakers decided to exclude casinos when they passed the Philippines’ original anti-money laundering act out of concerns that not doing so would scare off foreign investment. In 2013 the law was revised, but at the request of some legislators and the local gaming regulator Pagcor, casinos remained exempt. Last month the head of the Philippine Securities and Exchange Commission, Teresita Herbosa, said her office would push for this immunity to end. Ground broken for Vietnam’s second integrated resort Work finally began on Vietnam’s Nam Hoi An Casino Resort after more than three years of delays. The project, which is located near to the UNESCO World Heritage city of Hoi An, is a joint venture of local investment bank VinaCapital, Hong Kong-based retailer Chow Tai Fook Enterprises and Macau junket operator SunCity Group. Its first phase should cost US$500 million and cover 160 hectares. Slated to open in 2019, it should join the Ho Tram Strip resort as the country’s only other high-end integrated resort catering to international tourists. Genting Malaysia was the original partner of VinaCapital after the project was licensed in 2010. But it dropped out in 2012 over concerns that the government’s demand for a minimum US$4 billion investment was too high, given that casinos in Vietnam are closed to its own citizens. Last year Chow Tai Fook, a jewelry retailer that has expanded into casinos with a stake in a Brisbane resort now under construction, acquired 78% of the Vietnamese project for US$387 million. VinaCapital owns the remainder, although it has announced it will boost its stake to 32%. Ultimately Nam Hoi An should cover 985 hectares and boast hotels, serviced apartments and a golf course.