Inside Asian Gaming

December 2008 | INSIDE ASIAN GAMING 33 In Focus Among that group of Chinese millionaires are a group Merrill labelled as ‘Ultra-High Net Worth Individuals’. These are nearly 5,000 people with net worth of at least US$30 million. Of that cohort, 106 were classed as US dollar billionaires. An obvious question is how do these third party betting agentsmake contact with such potentially lucrative players in the first place, given that in China, a key market for Macau and casinos overseas, the advertising and marketing of gambling and gambling products is illegal? Networking The answer is many different ways— some of them through introduction or social networking and some of them through a growing system of VIP clubs. “You can think of the junket network as the foot soldiers of a multi-level marketing strategy, rather like that you might find for a company selling consumer products such as Amway,” the industry insider tells IAG . “They have thousands and thousands of people in China. In each province and each city, they know all the important people. They know who’s who. They know who are the big factory owners, they know the business people, they know what business they’re in, and by knowing them they have a way to help these ‘customers’ to come to Macau and gamble. “Because advertising of gambling is clearly prohibited in China, the junkets provide an important network,”he adds. The source says the network of VIP clubs is growing within Mainland China.They have many of the luxury facilities found on the VIP floors of Macau casinos—with the crucial difference that there are no gaming tables or machines, and no gambling is permitted. Quality service “Some of the junkets have VIP clubs in China and these are very often multi- purpose entertainment centres,” explains the insider. “Typically they have Internet facilities, they have massage facilities, and they have theatres. In China nowadays, these VIP clubs or entertainment centres are increasingly becoming a form of competition to the hotels. “The hotels are inmany cases getting less and less business because at the VIP clubs you can stay overnight—it’s much cheaper than a hotel.You can have amassage,you can get food, you can watch movies, you can get online—you can get everything you need. In every town in China, the VIP entertainment industry is booming. “Many of the junkets actually have their service centre at these clubs, as a way to acquire VIP customers. They issue them with membership cards, and they also have affiliates—organisations in different casinos in Macau or the Philippines or other Asian gaming jurisdictions. Comprehensive service “Once these rich people in China become a member of one of these clubs, then transport can be organised so that they can