Inside Asian Gaming

IAG JUN 2022年6月 亞博匯 76 A character inErnest H e m i n g w a y ’ s novel The Sun Also Rises was asked how he went bankrupt, to which he replied, “Two ways. Gradually and then suddenly”. That’s an apt description of the decline of Macau’s junket industry, which changed irrevocably after new gaming regulations were adopted in January following years of ever more draconian restrictions. With the gradual and then sudden demise of the Macau junket industry, casino concessionaires are confronted with a stark choice: migrate junket players to in-house premium direct programs or rethink their Macau operations in fundamental ways. THE CHALLENGE OF ENGAGING JUNKET PLAYERS Migrating programs from junket to in-house programs requires reimagining casino credit: no small feat in Macau. The challenge of extending credit in Macau is multi-faceted. First, casino credit is not a valid credit instrument in most Asian jurisdictions, including the People’s Republic of China (PRC). Second, many – if not most – junket patrons have few assets in markets where casino credit is enforceable. Third, unlike many other major markets, winnings are taxable even if those winnings are derived from credit which subsequently goes bad. Last, strict know-your-customer (KYC) regulation constrains engaging with many patrons in emerging markets. We recently analyzed a junket receivables database and highlighted some interesting takeaways from this analysis, which proposes a novel approach to understanding these patrons’ creditworthiness. COLUMNISTS