Inside Asian Gaming

October 2012 | INSIDE ASIAN GAMING 31 Market Outlook before the nation’s Casino Regulatory Authority and lawmakers: the issueof junkets (which are often said to be a necessary part of attracting VIP gamblers and have been a boon for Macau), the manner in which credit is extended to VIPs, and restrictions on citizens and permanent residents wanting to gamble. Two junket approvals were given last year—both linked to Genting’s Resorts World Sentosa—but these are relatively small operators and have not moved the needle much in terms of the bottom line. “The two junkets haven’t really had an impact in any way whatsoever,” says one Malaysia-based gaming analyst. Operators may be hoping for more junket approvals next year, but these might also require more disclosures and a tightening of lending practices. And it is yet unclear whether the much more controlled atmosphere of Singapore versus the freewheeling Macau market can actually sustain larger-scale junkets that prosper. “Frommy understanding there shouldbe more approvals next year,” says the analyst. “How that works is, junkets that didn’t make the cut could disclose more next year and could partner with more savory chaperones that will [help] them to get the licenses.” “From my understanding there should be more approvals next year. How that works is, junkets that didn’t make the cut could disclose more next year and could partner with more savory chaperones that will [help] them to get the licenses.” Another factor that could help approvals gain momentum is Singapore’s status as a renminbi (RMB) trading hub. Beijing signed a memorandum of understanding with Singapore in July indicating that two mainland banks currently operating in the city-state will be granted full RMB licenses, with one acting as a clearing bank—a role that Bank of China already fulfills in Hong Kong. “Clearing RMB transactions and taking RMB deposits in Singapore will help the flow of currency of RMB to Singapore, but that’s more of a 2013 story, and the identities of the two banks haven’t been revealed yet,” says the analyst. “The next round of [junket] approvals is important, but it’s also equally important for Singapore to be set up as a RMB trading hub. Those two come hand in hand. If one happens without the other then there won’t be much impact.” An improved position for Singapore in globalRMBflowsandafinancialinfrastructure that helps smooth the Chinese currency into the Lion City would help mainland gamblers access the market and could pave the way for further regulatory easing in the future— especially if links and investment between the two countries improve. And this could in theorymake it easier for middlemen that dabble in credit, like junket operators, to gain a legitimate foothold in the city-state. Universal Studios theme park at Resorts World Sentosa