Inside Asian Gaming

INSIDE ASIAN GAMING | February 2010 44 Briefs Regional Briefs Macau’s balancing act The difficult balance of keeping Chinese people in jobs and happy, but preventing them blowing too much of that money in Macau casinos, has been illustrated once again. In January, Macau’s casino revenue jumped 63% compared to the equivalent period a year earlier, reaching 14 billion patacas (US$1.75 billion) according to unofficial figures from Lusa, the Portuguese- language news agency. The January tally is 11% higher than the previous record of 12.6 billion patacas set during the “Golden Week” holiday last October, when China also marked the 60th anniversary of the People’s Republic. Macau’s revenue surge since the final quarter of 2009 has been attributed by analysts to the positive effects of China’s financial stimulus package. The package—including subsidies to Chinese consumers to buy home produced goods—has helped to keep factory owners in Southern China (the biggest customers at Macau casinos) busy with orders just as demand dropped in the recession-hit West. That stimulus package has, in turn, helped to pump plenty of money into asset classes such as Chinese equities and property and, by extension, into the informal credit network for Chinese entrepreneurs to gamble in Macau. All governments—not just communist China—like to use economic levers to stop their economies overheating. That’s in order to prevent socially damaging phenomena such as widening wealth gaps, inflation and unsustainable asset bubbles. Given that Macau’s gross gaming revenue has been revving up since the final quarter of 2009 (recording a 59% year-on-year increase in November and a 48% hike in December), it seems more brake pedal action from Beijing in the form of visa restrictions and curtailment of Mainland credit markets can be expected soon. Junket-free Singapore likely, says LVS Las Vegas Sands Corp says its business plan for Marina Bay Sands in Singapore is working on the assumption that junkets won’t be part of the mix. The US$6 billion, 2,500-room property is expected to have its first phase opening in the second quarter of this year. In Macau, gambling agents account for nearly all the high roller business brought into the casinos. But Singapore has set the bar so high in terms of the rules and reporting conditions for junkets that LVS thinks agents will be discouraged from even applying for permits to operate. LVS won’t be shedding too many tears if the junkets stay away, as it claims to make 100% more margin on its direct VIP players in Macau than on those brought in by the middlemen agents. “We are building our [Singapore] organisation on the anticipation that we do no junket business,” LVS President and Chief Operating Officer Michael Leven told an investors’ conference in Las Vegas. “We think that junket operators will not apply for licences under the restrictions in Singapore, with the exception of potentially a few local junket operators out of Singapore itself. The disclosure items in that situation are very, very difficult and we don’t think they’ll do it,” he said. Under rules issued by Singapore’s Casino Regulatory Authority, any junket agents will have to make detailed financial disclosures, submit to finger and palm printing and even pay for their own background checks. The would-be junket customers will additionally be required to give their names, home addresses, passport numbers, and the value of all complimentary services received from the casino or junket. It doesn’t end there. Casinos planning to host junket players must provide Singapore’s Casino Regulatory Authority with a report five days in advance that details its agreement with the junket organiser, including the commission rates to be paid. Casinos must follow up with an arrival report at least an hour before play begins, listing each player’s name and biographical data. In Macau, regulation of the gambling agent sector is strong in theory, but much more relaxed in terms of practice and in enforcement. Macau has around 170 gaming promoters officially registered with the city’s regulator, the Gaming Inspection and Coordination Bureau (DICJ). But within Macau and over the border in Mainland China, there are thought to be several thousand sub-agents involved in the issuance and collection of credit and the delivery of players to the casinos and to the bigger junkets. Thriller for Ponte 16 A Michael Jackson Gallery containing 40 items used during the singer’s career has opened at Macau’s Ponte 16 casino resort. The star Marina Bay Sands