Last year, Macau’s government announced plans to impose new controls on junkets, partly as a reaction to a rash of scandals in which junket investors were left high and dry following internal thefts and shoddy accounting practices.
On Thursday, Bloomberg reported that the special administrative region was crafting new rules that would require new gaming promoters to provide evidence that they had at least MOP 10m (US $1.3m) in working capital, 100x the current base of MOP 100k. The new rules would also require that at least one junket shareholder be a resident of Macau.
The plan assumes that anyone is still interested in starting a new junket operation in Macau. CLSA gaming analyst Aaron Fischer told Bloomberg that his firm didn’t expect “many, if any, new junkets in Macau as the current ones are fighting for survival.”
The number of junkets directing high-rollers into Macau casino VIP rooms has undergone Costanza-like shrinkage during the gaming hub’s 22-month long revenue decline. Even the surviving junkets aren’t interested in expanding their business to fill the new casinos opening on Cotai this year. The new rules, which could come up for discussion later this month, will at least ensure that junkets won’t have to face too much new competition.
BAD DEBT BLACKLIST IN THE WORKS?
The rules may also include something the junkets have been seeking for years: a blacklist of players who fail to honor their gambling debts.
Beijing’s crackdown on corruption among public officials forced junkets to cast a wider net for customers, which also led them to take greater risks in extending credit, leading to a greater number of loans being repaid less promptly, if repaid at all.
Macau’s more prominent junkets always denied any official connection to the ‘name and shame’ website 99world.com that launched in 2013 but they nonetheless expressed support for the concept of a publicly accessible list of people who’d demonstrated an inability or unwillingness to repay their gambling debts.
Problem is, Macau’s personal data protection laws don’t permit such information to be publicly disseminated. Last year, 99world.com’s alleged operator was sentenced to six months in prison for violating these statutes. A non-public debtor database established by and distributed among junkets was halted over concerns that junket operators could face the same fate.