Inside Asian Gaming

FEBRUARY 2016 inside asian gaming 43 against corruption should also deter other potential bidders, according to the investment bank. Passed in 2009, Taiwan’s “Offshore Islands Development Act” gave the go-ahead for smaller islands under its jurisdiction to hold referenda to allow casino gaming. The island of Matsu, which is some 20km off the Chinese coast near to the Fujian provincial capital of Fuzhou, has since voted in favor. Further progress would require Taiwan’s legislature to pass two more bills; one laying out the law for casinos, and another establishing regulations for casino- driven integrated resorts. In a separate development, Taiwanese police busted three illegal gambling operations in the run up to the country’s polls. All were taking bets on the outcome of the presidential election. Macau junket woes continue REGIONAL BRIEFS Amid crackdowns in China and stricter oversight at home, the collapse of Macau’s gaming promoters, also known as junkets, is continuing. On January 13, Macau’s Gaming Inspection and Coordination Bureau (DICJ) announced it would not renew the licenses of 35 promoters that had failed to comply with new guidelines issued in October, requiring them to compile and submit monthly accounting reports. That would reduce the total number of licensed junkets from 218 reported in 2014, down to 148. While IAG understands the 35 promoters represented the smaller end of the industry, the announcement is hardly good news. A week earlier Iao Kun Group, which operates five VIP rooms in Macau, announced that its rolling chip turnover in the city had plummeted in 2015 by 61%, to US$6.42 billion. Junket operators have long been a vital component of Macau’s gambling industry, recruiting high rollers to visit casinos in the city with offers of credit and hospitality in exchange for a share of the revenue generated. Over the past two years, however, their main customer base in China has been hit hard by president Xi Jinping’s anti-corruption campaign, together with a crackdown against their marketing operations there and the underground banking system they use to transfer funds. In a January meeting with the Macau Junkets Operator Association, Macau’s Secretary for Economy and Finance Lionel Leong Vai Tac said there was a need to strengthen law enforcement and monitoring of junkets. He also suggested the drafting of new industry regulations, something analysts say will push still more operators out of business. According to Sanford Bernstein, revenue from Macau’s VIP segment was less than half the city’s total gambling turnover in December, down from around 80% in the boom years. The Macau Association of Gaming and Entertainment Promoters says the total number of VIP gaming rooms in the city has fallen by 30 to 40 over the past six months, leaving around 100 still in operation. Nephew of Macau’s king of gambling on trial for pimping Alan Ho, nephew of Macau’s gambling kingpin Stanley Ho, is on trial in the city for running a casino-linked prostitution ring. According to the prosecution, the ring occupied a hundred rooms and two whole floors of the city’s landmark Lisboa hotel, employed 2,400 sex workers and took in US$50 million over two years. The chief Judiciary Police officer investigating the case said the hotel’s senior manager Kelly Wang was in charge of the ring. He added that Ho, who is 69 and was the hotel’s executive director at the time, assessed the women’s “physical attributes” and took charge when Wang was away. Prostitutes employed nearly all came from mainland China. They allegedly paid 150,000 yuan (US$23,000) per year to attract clients by parading in the property’s shopping mall. The Lisboa casino was the centerpiece of the gambling empire of Stanley Ho, who held the gaming monopoly in Macau for 40 years until 2002, making him the most powerful man in the city and one of the richest in Asia. While the elder Ho at 94 now takes a back seat, two of his children and one of his four wives each a holds a substantial stake in one of three of the city’s six gambling concessions. Given the clan’s standing, the very public arrest of Alan Ho, along with Wang and five other defendants in January last year was remarkable. Prostitution is not illegal in Macau but pimping carries up to eight years in jail. Leaders of criminal syndicates can get eight to fifteen years. The goings on at the Lisboa “racetrack” had long been common knowledge and widely publicized on YouTube. Given this, lawyers representing Alan Ho asked the chief investigating inspector why the Judiciary Police had only busted the ring last year. The officer replied he could not comment on past investigations.