Post by Blitz on Jan 5, 2022 9:39:28 GMT -5
Singapore type player agents possible for Macau: Daiwa
Jan 05, 2022 Newsdesk
www.ggrasia.com/singapore-type-player-agents-possible-for-macau-daiwa/
The mainland China authorities might have no problems with seeing Macau junkets continue their work as recruiters of casino players from outside China, as and when Macau is able to open its borders to visitors from overseas, says a report from Daiwa Capital Markets Hong Kong Ltd.
The regulatory model for achieving that, might look something like how Singapore runs its International Market Agent system of licensed gaming promoters permitted to introduce high-value players to the city-state’s casinos, says the 49-page report from analysts Andrew Chung and Terry Ng.
They described the rules for the Singapore agent system as “some of the most stringent… among worldwide gaming jurisdictions”.
Singapore’s agent application process was “significantly more complex,” than currently for junkets in Macau, “with more extensive probity checks,” noted Daiwa.
Another important difference between Singapore agents and Macau junkets, was that in Singapore, “sharing of commissions is prohibited with other parties,” observed Daiwa’s report.
In any case, even before the detention in November of leading Macau junket boss Alvin Chau Cheok Wa, founder of Suncity Group, on suspicion of helping mainland China customers gamble online overseas, the Macau authorities had been talking about stricter regulations for that city’s licensed gaming promoters, as junkets are known locally.
The way VIP junkets had been operating, in terms of introducing mostly players from mainland China, organising credit for them, and coordinating collection on any losses they incurred while gambling in Macau, would “no longer be permitted”, suggested the analysts.
That was in the context of a new regulatory framework for Macau casino gaming, due to be in place before a fresh public tender can occur to supersede the current six licences due to expire in June this year.
The issues that might be looked at included the legal status of the sub-agent system, a scholar told GGRAsia last year. Such people are themselves not currently licensed by Macau, but according to some investment analysts, have often done much of the work on the mainland side of the border, to recruit players and collect on losses.
Some of the city’s operators confirmed to GGRAsia in late December that they had terminated partnerships with their existing Macau-licensed junket providers.
House-managed VIPs and foreign players
The Daiwa analysts suggested that in future, the highest-value gamblers in Macau will either be “direct VIPs”, i.e. with customer management done by a casino itself, or “international VIPs” brought into the market by “internationally accepted junkets” under stringent regulatory conditions, akin to Singapore’s system.
“Singapore VIP gross gaming revenue [GGR] – internal direct VIP and junkets – in 2019 was US$1.68 billion, or 4.6 percent of Macau’s total GGR in 2019,” wrote the Daiwa analysts.
If junkets – whether from Macau or outside – that were already geared to serve players from outside mainland China were to be active in Macau, “we expect Macau VIP GGR to reach between US$1.68 billion and US$3 billion in due course,” the note stated.
The Daiwa team believed that Macau could still get “5 to 10 percent” of total annual GGR from VIP operations, even once a new regulatory system was in place.
Mr Chung and Mr Ng wrote, referring to Macau licensees with United States-based ownership: “We note that the parent companies of three of the six” current Macau operators “have track records of decades of compliance with stringent regulations,” in the United States, “while serving a large number of VIPs,” managed either internally or via agents.
“The Macau and mainland governments would likely want Macau to see at least 20 percent to 30 percent of GGR contribution from outside Greater China: currently the GGR contribution from mainland China is over 95 percent,” suggested the Daiwa analysts.
The Daiwa team asserted the target markets could include Chinese nationals with permanent residency in either Hong Kong or Macau, or such people that also have assets or cash outside the mainland, that could be pledged as security for casino play.
Other possible target markets might be international VIPs within the Asia Pacific region, who typically play in casinos in either Singapore, Australia, or South Korea.
Due to the Covid-19 pandemic, foreigners are currently not generally permitted to enter Macau, unless they are also Macau ID holders. Mainland China is presently the only place that has a largely quarantine-free travel arrangement with Macau.
Jan 05, 2022 Newsdesk
www.ggrasia.com/singapore-type-player-agents-possible-for-macau-daiwa/
The mainland China authorities might have no problems with seeing Macau junkets continue their work as recruiters of casino players from outside China, as and when Macau is able to open its borders to visitors from overseas, says a report from Daiwa Capital Markets Hong Kong Ltd.
The regulatory model for achieving that, might look something like how Singapore runs its International Market Agent system of licensed gaming promoters permitted to introduce high-value players to the city-state’s casinos, says the 49-page report from analysts Andrew Chung and Terry Ng.
They described the rules for the Singapore agent system as “some of the most stringent… among worldwide gaming jurisdictions”.
Singapore’s agent application process was “significantly more complex,” than currently for junkets in Macau, “with more extensive probity checks,” noted Daiwa.
Another important difference between Singapore agents and Macau junkets, was that in Singapore, “sharing of commissions is prohibited with other parties,” observed Daiwa’s report.
In any case, even before the detention in November of leading Macau junket boss Alvin Chau Cheok Wa, founder of Suncity Group, on suspicion of helping mainland China customers gamble online overseas, the Macau authorities had been talking about stricter regulations for that city’s licensed gaming promoters, as junkets are known locally.
The way VIP junkets had been operating, in terms of introducing mostly players from mainland China, organising credit for them, and coordinating collection on any losses they incurred while gambling in Macau, would “no longer be permitted”, suggested the analysts.
That was in the context of a new regulatory framework for Macau casino gaming, due to be in place before a fresh public tender can occur to supersede the current six licences due to expire in June this year.
The issues that might be looked at included the legal status of the sub-agent system, a scholar told GGRAsia last year. Such people are themselves not currently licensed by Macau, but according to some investment analysts, have often done much of the work on the mainland side of the border, to recruit players and collect on losses.
Some of the city’s operators confirmed to GGRAsia in late December that they had terminated partnerships with their existing Macau-licensed junket providers.
House-managed VIPs and foreign players
The Daiwa analysts suggested that in future, the highest-value gamblers in Macau will either be “direct VIPs”, i.e. with customer management done by a casino itself, or “international VIPs” brought into the market by “internationally accepted junkets” under stringent regulatory conditions, akin to Singapore’s system.
“Singapore VIP gross gaming revenue [GGR] – internal direct VIP and junkets – in 2019 was US$1.68 billion, or 4.6 percent of Macau’s total GGR in 2019,” wrote the Daiwa analysts.
If junkets – whether from Macau or outside – that were already geared to serve players from outside mainland China were to be active in Macau, “we expect Macau VIP GGR to reach between US$1.68 billion and US$3 billion in due course,” the note stated.
The Daiwa team believed that Macau could still get “5 to 10 percent” of total annual GGR from VIP operations, even once a new regulatory system was in place.
Mr Chung and Mr Ng wrote, referring to Macau licensees with United States-based ownership: “We note that the parent companies of three of the six” current Macau operators “have track records of decades of compliance with stringent regulations,” in the United States, “while serving a large number of VIPs,” managed either internally or via agents.
“The Macau and mainland governments would likely want Macau to see at least 20 percent to 30 percent of GGR contribution from outside Greater China: currently the GGR contribution from mainland China is over 95 percent,” suggested the Daiwa analysts.
The Daiwa team asserted the target markets could include Chinese nationals with permanent residency in either Hong Kong or Macau, or such people that also have assets or cash outside the mainland, that could be pledged as security for casino play.
Other possible target markets might be international VIPs within the Asia Pacific region, who typically play in casinos in either Singapore, Australia, or South Korea.
Due to the Covid-19 pandemic, foreigners are currently not generally permitted to enter Macau, unless they are also Macau ID holders. Mainland China is presently the only place that has a largely quarantine-free travel arrangement with Macau.
