Inside Asian Gaming

INSIDE ASIAN GAMING | January 2014 26 In Focus or provide some kind of asset collateral in China. Then they can come over to Macau without bringing any cash,” the insider explains, noting the low limit on bringing cash out of China. Naturally, profitability hinges on the ability of the agents to collect debts, given that gambling debts are not recognized as legally binding contracts in China. “The casinos in Macau essentially extend the credit to the junket operators. The casinos don’t want to touch the credit or the debt collection issue directly” due to issues such as compliance and anti- money-laundering, says the insider. “The junket operators really know their customers and have this very good network of local people in China. If you lose, you’ll be given a certain amount of time to pay up, then the local representatives are going to follow you wherever you go until you do,” he adds. Inside the VIP room VIP rooms are often mentioned in reports about gaming revenue in Macau, but most people don’t really know how they work—the operation is much different from other jurisdictions. Although the table game operations within the rooms are run by the casino operator, all the other action inside is controlled by the VIP room operator (who is either a junket himself and brings his own players to the room, and/or allows one or more other junkets to operate in the room). The VIP room operation recruits players, provides them credit to play with, then collects all gambling debts, and does so independently of the casino operator. Operators can either lease out a room at a fixed rental, or be allowed to operate within a room by the casino if they can meet certain turnover targets. The VIP room usually has its own “junket cage” or cashier counter, where a set or sets of chips unique to that room are used. Although the casino operator provides the VIP roomwith dealers and security personnel, the other staff within the room are generally employed by the VIP room operators. These staff are mostly public relations hosts (who perform the function of “rolling” chips between the players and the VIP cage, exchanging cash chips for junket chips) and junket cashiers, but junkets also supply cage staff and a cage manager. VIP rooms also have a general manager or the owner’s representative. The main currency in the cage is the junket chips. The cage may deal with one of more sets of chips so as to keep track of the players belonging to either different junket agents or playing under different commission schemes. Players are given a marker, which may not actually involve credit at all. It just means that the VIP room is issuing chips without any cash changing hands inside the room. In reality, the cash may have already been transferred to the VIP roomoperator’s offshore account, and all the VIP cage knows is that the VIP room operator has directed it to issue a certain value of chips to this particular patron. In most cases, however, credit is involved Beyond rolling chips, the typical PR host in Macau performs the duties of a companion, host, waitress and assistant. Macau PR hosts take orders and serve F&B. They may also be required to physically record each bet as it is placed, as well as keep a real-time up-to-date record of the players’ (and house’s) win/loss performance. Macau PR hosts will even do the scorekeeping for the baccarat outcomes, but most importantly, they are sometimes trained and permitted to advise the customers on which bet to place next.