The President of the Macau Association of Gaming and Entertainment Promoters says licensed junkets must revert back to their original business model if they are to have a future under proposed amendments to Macau’s gaming law.
Kwok Chi Chung spoke with Inside Asian Gaming on Monday after representatives of the city’s junket industry met with the Gaming Inspection and Coordination Bureau (DICJ) late last week to gain a better understanding of the new gaming law and how it will impact the operations of licensed promoters.
While Kwok said a number of key issues – such as the role of agents and a proposal to limit each junket to working with a single casino concessionaire – have yet to be clarified, he acknowledged that junkets would likely need to revert back to their original business model of only receiving commission on chips rolled at gaming tables rather than through revenue share agreements.
This follows details contained within the government’s draft bill which not only prohibit rev share arrangements between junkets and concessionaires but also put an end to junkets operating out of dedicated junket rooms within Macau’s casinos.
The original rolling chip model, pioneered by Dr Stanley Ho in the 1970s, allowed for designated “chip rollers” or Daa Maa Zai as they were known at the time to bring players into the city’s casinos and sell non-cash chips to these players in return for 0.7% commission on all chips rolled (lost).
Asked if junkets still have a role to play in Macau, Kwok told IAG, “Promoters have existed since before the liberalization of the gaming industry and have been expanding during these past 20 years.
“During the process, many irregular business models came out, some of them illegal, so now the government wants to [better] regulate [the industry] and give the right direction to [VIP] promoters.
“This direction is just ‘back to the starting point’, because before the handover [of Macau back to China in 1999], in the beginning, we were already working in that direction.
“Actually, I think promoters should adapt to the new law and follow the direction which we used to follow in the beginning.
“I am very confident about the future of promoters because we used to work like that. I think no matter what we should work legally, so promoters should change their business strategy and do business legally.”
Kwok said that although he supports the implementation of amendments to the gaming law, the junket industry is still seeking answers to how new rules limiting its interaction with concessionaires will be applied. In particular he pointed to plans to restrict each licensed promoter to “only carry out the activity of promoting games in one concessionaire.”
“One of the questions we asked the government was about this new law that allows promoters to only cooperate with one IR,” Kwok told IAG.
“For example, during the one-year [junket] license, if we want to change the IR company we cooperate with, can we change? Or do we have to stop the license when we want to change company?
“According to the gaming bill, when one promoter can only cooperate with one IR, the business scope of the promoters will become very small. This is one of the issues I am concerned about the most.
“Some promoters who attended the meeting were also concerned by the legal position of agents compared with promoters. The DICJ explained that the current law already has regulations on agents which allows agents to cooperate with more than one promoter. But it seems strange that an agent can cooperate with more than one promoter when each promoter can only cooperate with one [IR].”
Asked if junkets had received the answers they had been looking for, Kwok said, “Some questions the DICJ answered in the meeting but some questions were more complex. The DICJ said they had taken note of our questions and will further analyze them.”
As previously reported by IAG, the number of junkets licensed by the DICJ in 2022 was slashed to just 46 in January, down from 85 a year earlier, although the regulator announced shortly afterwards that it was still awaiting additional information from 29 VIP gaming promoters that were yet to be issued a license.
The 2022 figure is well below the record 235 junkets licensed to operate back in 2013, with the number of licensed junkets having fallen in all but one of the nine years since.