Macau junket operators still allowed to operate if legal requirements fulfilled

Junket operators in Macau will still be allowed to operate in the Chinese enclave in the future, despite the ongoing crackdown on cross-border gambling and a new gaming law review. The news was delivered by Lei Wai Nong, Secretary for Economy and Finance, in a press conference on Monday.

According to the Secretary, agreements between junket operators and gaming concessionaires concerning VIP rooms activities will still be allowed in the future as long as they “fulfill all legal requirements,” reports Macau Business.

“We have a legal framework that allows for the relationship between gaming operators and junkets if everything is done according to the law,” Lei said in the context of a ceremony to celebrate the 22nd anniversary of the establishment of the Macau SAR.

But despite this nod to junket operators, the Secretary underlined they must be mindful that, when carrying out gambling promotion activities, “they must respect Macau regulations” and that should they carry these outside the SAR, then “they must respect the regulations of that jurisdiction.”

The Secretary’s announcement comes amid an ongoing crackdown on cross-border gambling and a new gaming law review in Macau. Mainland China, where gambling is illegal, sees junkets as responsible for helping to siphon billions of yuan overseas.

Last month, the junket sector took a big hit after the arrest of Alvin Chau, head of Sun City, the largest VIP gaming promoter in Macau. The businessman was charged with allegedly running a criminal syndicate, as well as being accused of illegal gambling and money laundering activities.

Following the news, Sun City Gaming Promotion Company Limited announced the closure of all its VIP rooms in the city, earlier this month. Gaming promoter Tak Chun, the second-largest in Macau, also announced certain casinos in the region were temporarily suspending their cooperation relationship with them.

Local media further reports that certain gaming operators in the enclave, including Wynn Macau, Sands China and Melco Resorts, are planning to terminate their junket-operated VIP rooms, amid increased scrutiny of the sector. Meanwhile, SJM Resorts and Galaxy Entertainment Group are reportedly maintaining their current agreements.

The Secretary for Economy and Finance further added that labor authorities have received notifications from gaming concessionaires that adjustments have been made concerning their agreements with junket promoters, further reports Macau Business.

“Gaming table numbers also have changed but so far the information is still not very clear,” Lei said. “The Gaming Inspection and Coordination Bureau (DICJ) has requested operators for more details and explanations, later will have clearer information.”

The DICJ currently issues 85 licenses each year, a number that has been on decrease from the high 235 in 2013. Current junket operator licenses will expire by December 31, with requests for renewal sent to the DICJ this month.

Lei further noted that the gaming law revision public consultation document included VIP gambling promotion. Junket operators will still be allowed to exist, although the document proposed increased penalties against accepting cash or illegal deposits by promoters. Gaming concessionaires bear legal responsibility in case of infractions by junket operators with whom they have agreements.

The Secretary said there will be “an adjustment cycle,” with further modifications to be introduced. “We are mainly focused on the issue that VIP rooms closures do not impact croupiers, supervisors, security employees,” he said. “As for the workers directly employed by junkets, we will proceed in the best way: that responsibility cannot be transferred to society.”

“Junket promoters have always been important and we will make adjustments in the future,” Lei stated. “If they fulfill all required conditions we will accept and evaluate the request. We will proceed according to the existing regulations.”

Earlier this week, Macau gaming professor and former lawmaker Davis Fong said he expected operators to still flourish, but called on casinos in the region to switch focus to foreign tourists, instead of targeting players from mainland China.

According to the expert, given the challenges of adapting to the crackdown on cross-border gambling, gaming services “will depend on exportation,” which implies “sourcing clients from different regions.”