Inside Asian Gaming

July 2016 inside asian gaming 29 casinos make money and why they would even consider paying such high commissions? Junkets in Asia are quite different from the rest of the world and the players are also different in their propensity for risk, their propensity for gaming and their access to large amounts of money for gaming purposes. Asian players without question represent some of the largest players in the world. One additional factor is volume of business. Despite the casino’s ability to only keep a small percentage of revenue based upon turnover, the turnover volume of this business is huge in comparison to business volumes in Western casinos. Simply stated, a small percentage of huge volume translates to more revenue than a high percentage of a much smaller volume of turnover. The law of economics kicks in and Asian casinos continue to promote Non- Negotiable Chip turnover commission programs. We also have to consider the rewards or benefits for the casinos. There are actually many benefits. For starters, the casinos do not have to intimately know their customers. It is the junkets that have to assume this responsibility because their business model in Asia is predicated upon the junket issuing casino credit to their players as well as being responsible for the collection of any credit issued. The casino’s primary concern is settlement with the junket at the end of each month on any money owed to the casino. Casinos often hedge the risk by obtaining a security deposit or some type of collateral or assurance from their junkets. Most casinos and junkets in Asia understand regulatory compliance and understand that laws are either black or white but not gray in color. However, some of the areas that junkets actually operate in are gray areas. The largest involves the movement of funds. Many countries in Asia, including China, have currency control regulations in place. Nevertheless, junkets still seem to find ways to collect their debts from their players once they arrive back in their home countries after a gaming trip and they still manage to pay off any obligations to the casino at the end of each month. The title of this article is, “Casino junkets: part art, part science, part voodoo.” This is the voodoo part. Trying to trace the flow of money or movement of funds seems to resemble black magic in many ways but that subject is better left for another time. Business in Macau has been on the decline for the past two years with substantial drops in casino revenue for a variety of different reasons. One is the Chinese Central Government’s crackdown on corruption which has caused a ripple effect from the players to the Features Macau’s casinos must diversify their gaming options to attract new players In the past, players from other parts of the world were viewed as small players by Macau casino operators and not necessarily welcomed with open arms. Consequently, many returned home disappointed with the whole experience. Macau can’t afford to lose these players anymore.