Restrict, reuse, recycle

Some 19 junkets will have to improve their activities and have until the end of the year, the renewal date of the junket licence, in order to do so, says the Director of the Gaming Inspection and Co-ordination Bureau, Paulo Martins Chan.
“What we want is more regulated junket activity. Right now, we’ve finished the inspection of the accounting system of all 145 junkets. Some of them are unsatisfactory so we’re giving some time for them to improve until the end of the year”, notes the Director. Chan also comments that the government still “treasures” the “huge” contribution by junkets to the city’s economy, despite the recent focus on mass market and that the DICJ is “working hard to regulate more” junket activities in an environment that currently suggests a “more stable development of our gaming revenue.”
The Director’s comments came on the sidelines of the MGS Entertainment Show, which started yesterday at The Venetian and runs until Thursday.
The Director also commented upon the recent ruling on the Dore junket case: “Certainly, there will be a precedent but I don’t think that case solved every problem of the Dore case because there are still lots of issues involved” although regarding current and upcoming cases relating to junkets “we’re expecting that the results of this will certainly be very important as a ruling for future cases”.
The Director also commented that the group is working towards the elaboration of a blacklist of debtors for casinos, despite “a lot of legal issues” which the group has to first address.

Controlling junkets
Regarding this blacklist, professor Wang Changbin of the Gaming Teaching and Research Centre of the Macao Polytechnic Institute points out that it “might also help but I doubt it’s workable because the VIP contractors may not like to share their customers’ information to others and the privacy law in Macau is quite strict.”
However, the professor envisages other strategies to help improve the current system.
The first such measure is to expand the scope of those going through suitability tests to go beyond shareholders, directors and other “upper management and key employees”, to include “middle managers and some important employees in key positions” as well as demanding more information from key employees who already have to register – whose current application form is only one page in length.
This should be coupled with scrutiny on the side of the regulator to “conduct our real investigation into the background of the applicants”, states the professor. However, to do this the professor proposes the establishment of a “team with knowledge and skills of investigation”, stating that “government employees don’t have enough experience” in the area.
This team would also seek support from other jurisdictions, as “many of the licensed applicants are from outside Macau”, notes the professor.
Basically, the professor proposes that “we have to regulate the VIP rooms as an operator . . . [as] . . . the threshold of running a VIP room in Macau is quite low . . . [but] . . . the VIP rooms take a lot of risk” in the way their businesses are run.
In the meantime, the professor suggests a less intensive approach.
“I suggest maybe we can regulate from the perspective of the law – demanding VIP contractors report to the government when the money borrowed is more than a certain amount”, says Wang, opining that “borrowing money should be in proportion to their (the junket’s) own capital”.
Wang points out that the junket system’s history in the MSAR stretches back to the 1980s when operator STDM “outsourced some of its VIP rooms to third parties who had a social network . . . [and] . . . many people were sent out of Macau to reach high-rollers and bring them to gamble in Macau”.
Given its long and continued presence in the MSAR, Wang says “the system is quite powerful”.