Inside Asian Gaming

INSIDE ASIAN GAMING | December 2010 22 currency export are maintained. A second political benefit for Singapore of allowing some junkets is that it would merely legitimise and regulate what is allegedly already happening in the form of proxy junkets. Inside Asian Gaming would like to point out we make no suggestion that the 20 current junket applicants in Singapore are involved in operating proxy junkets. Arguably by licensing some junkets legitimately, the CRA could create a ready- made watchdog to guard against proxies in the market. A junket that has gone to the trouble and expense of getting officially licensed will not want an unlicensed proxy junket encroaching on its turf. The licensed supplier will have a commercial interest in spotting and, if necessary, whistle blowing on anyone it suspects of being a proxy. By endorsingwhat in effect is amass rush by junkets toward the ‘in door’ of Singapore casino gaming, RWS is also arguably issuing a commercial challenge to LVS, which appears to have been very successful in recruiting a diverse collection of direct VIPs. MrAdelsonsaidduringthe3Qconference call: “I’ll tell you that I watch that [figures on VIPgamingatMBS]everysingleday,butIonly have access to the top 20 what we call the hit sheet—the top ten winners, top ten losers and the average number of countries that are represented—and those 20 customers are [from] eight to nine different countries. We get countries from all over the Pacific, from Laos and Cambodia and Myanmar. Let me get back to the beginning and say that our primary markets are Singapore, Malaysia and Indonesia.” The potential arrival of licensed junkets at RWS shouldn’t lose MBS any direct VIP business in the short term. Some direct players have apparently made a positive choice to go with MBS despite the fact the property may be paying them a lower commission on their roll (generally a maximum of 1.3% according to Michael Leven during the second quarter earnings call) compared to as much as 1.5% at RWS (a figure quoted by Mr Adelson in the same 2Q conference call). However, the advent of licensed junkets at RWS would potentially create commercial pressure for MBS to attempt to bring in its own junkets, or surrender VIP volume to RWS in exchange for maintaining margin on the MBS direct business. Even if MBS were to seek out and gain approval for junket partners as a defensive commercial move in response to RWS, it could have the unwanted side effect of diverting new players—who might otherwise qualify as the most profitable direct players with MBS—into the arms of the junkets. That’s a scenario that has already played out to LVS’s annoyance in Macau. Allowing VIP junkets to operate legitimately would potentially open the Singapore casino market to even more mainland Chinese high rollers… Such an opening up of the Singapore VIP market could, however, potentially have negative implications for diplomatic relations between China and Singapore Policy Outlook Marina Bay Sands