Inside Asian Gaming

INSIDE ASIAN GAMING | February 2011 28 gaming industry consultant, has been enlisted by the Singapore government to conduct background checks on all junket operators applying for licenses to operate in the city-state. A source quoted by Singapore’s Business Times revealed: “Spectrum has a staff of highly experienced executives who have relationships with law enforcement in other countries. This comes in handy when you’re trying to get background checks done on junket operators from countries or remote areas where it’s not easy to get answers about their financial capability, business background, tax history, or whether they have ties with organised crime. In some instances, it’s quite dangerous to do such checks.” Spectrum’s thorough background checks command sizeable fees, which have to be shouldered by the junket applicants and are non-refundable, even if their applications are rejected, which is why many junkets are believed to be waiting for clearer guidelines from the Singapore authorities before investing in the process. There is, though, the possibility of a potential upward revision in Singapore’s gaming revenue forecasts if some junkets do manage to pass the probity checks and secure licences to operate in the Lion City this year, points out CLSA’s Aaron Fischer. Singapore’s gaming market managed to thwart all expectations on the upside in the Year of the Tiger. If the past is any guide, don’t be surprised by a repeat performance this year. Cover Story The nightly Crane Dance at RWS features two 30-metre high animatronic cranes in a choreographed light and sound show licensed in Singapore, which requires strict checks on the personal probity of junket applicants, their staff and clients, including the source of the junkets’ working capital. Nevertheless, as our sister publication, Asian Gaming Intelligence , reported in June last year, according to our sources, Macau junket representatives had found their way around Singapore’s rigorous junket probity checks by simply checking into the casinos as individual VIPs and then passing on their chips to ‘friends’—who are essentially their junket customers. The media publicity surroundingMr Ong’s affidavit will probably result in greater official scrutiny of this alleged unlicensed junket activity. In a report released on 27th January, Sean Monaghan, HSBC’s senior regional consumer and gaming analyst, lowered his price target for Genting Singapore stock, stating “any clampdown on Marina Bay Sands could have implications for the greater Singapore casino market and, as such, Resorts World Sentosa (RWS).” Mr Monaghan continued: “If the government cracks down on this illicit segment (if there is one), then it is reasonable to assume that this segment may no longer exist in the 2011 or 2012 period. This means that market forecasts may currently be higher than what they would eventually be.” It is unclear how much the alleged unlicensed junkets have contributed to Singapore’s robust gaming revenues to date and what will be the impact of any possible crackdown on those junkets by the Singapore government. Mr Monaghan did suggest, however, that the allegation could make the Singapore government postpone the licensing of junkets. “If the Singapore government believes the Singapore casinos have been lax in terms of self-regulation, then it may not proceed with licensing junkets,” he said. Furthermore, if the Singapore government concludes that senior casino management was aware of or even sanctioned the unlicensed junket activity, and so “the government can’t trust the casinos to self-regulate, then there may be a monumental change in the way it regulates the industry,” added Mr Monaghan. Under the Spectrum microscope It was recently revealed that Spectrum Gaming Group, a New Jersey-based Spectrum’s thorough background checks command sizeable fees, which have to be shouldered by the junket applicants and are non-refundable, even if their applications are rejected, which is why many junkets are believed to be waiting for clearer guidelines from the Singapore authorities before investing in the process.