Inside Asian Gaming

INSIDE ASIAN GAMING | October 2012 24 In Focus Winning Friends and Influencing People An insider’s take on how casino junket agents recruit VIP players in China E xtending gambling credit toVIP players via sub-contracted third-party agents or sub agents, rather than direct from the casino to the player, is a central pillar of the Macau gaming industry. To a lesser extent it is also a feature of some other Asian land-based gambling jurisdictions including the Philippines and Cambodia. The online gambling industry in Asia also uses third- party agents for the provision of credit and collection of debts. The stakes are very high when it comes to recruiting high net worth casino players, because agents and subagents—depending on their place in the junket system pecking order—may be paid either a recruitment fee or take as commission a percentage of the revenue “rolled” by the VIP player over the course of a month, six months or a year. High Stakes There are potentially a lot of VIP players to be recruited in China and a lot of commission to be won. According to “Global Wealth Report 2012,” published by Credit Suisse Research Institute, there are 964,000 US-dollar-denominated millionaires in China, and the number is expected to almost double to 1.9 million over the next five years, as the private sector continues its rapid pace of development. By 2017, Credit Suisse says the country will have added another $18 trillion in family wealth to surpass Japan as the second-wealthiest nation. An obvious question is how do these third-party betting agents make 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? 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,”says a leading figure in the industry. “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