Macau to ban telephone ‘proxy’ betting in casino VIP rooms starting Monday, May 9

macau-casino-vip-telephone-proxy-betting-banMacau casinos will formally ban ‘proxy betting’ starting on Monday, a move that could put further downward pressure on the city’s VIP gambling market.

Beijing’s corruption crackdown has convinced many wealthy Chinese that it’s unwise to be seen traveling to Macau. Some got around this restriction by enlisting a trusted proxy, who would sit at a Macau gaming table relaying real-time card info to the VIP on the mainland, who would advise how he wished to wager on a particular hand.

Macau regulators tolerated this activity provided there was no real-time video information transmitted from the VIP room. Not all Macau operators allowed the activity – particularly US companies who feared violating ‘know your customer’ regulatory guidelines back home – but analysts estimated proxy betting accounted for between 5% and 10% of Macau’s total VIP turnover.

On Thursday, Wynn Resorts boss Steve Wynn discussed the matter during his company’s Q1 earnings call. Referencing industry rumors re a proxy betting clampdown, Wynn said Macau regulators had “ended it. Okay, as of now it is illegal, there is no more phone betting. They stopped it today, the [Gaming Inspection Coordination Bureau, aka DICJ) made it official. It is finito.”

Asked how much of an impact the ban would have on Wynn’s bottom line, Wynn president Matt Maddox claimed proxy betting was “insignificant to Wynn, I can tell you.” In 2014, Wynn Macau reportedly halted all proxy betting, only to quietly reverse course in spring 2015 after apparently realizing it was having a greater effect than anticipated.

On Friday, GGRAsia reported receiving an email from DICJ officials confirming that the regulator would impose “a ban on phone usage at gaming tables with effect on May 9.” The DICJ acknowledged that it had previously permitted the practice within certain guidelines, “but the practice invited misunderstandings and doubts.” The DICJ didn’t offer specifics on exactly what misunderstandings and doubts had arisen.

Only time will tell the impact of the ban, but MGM China CEO Grant Bowie, speaking on his own analyst call on Thursday, said the impact was “not going to be that significant” for casino operators. But Bowie believes the ban would bet “yet another continuation of pressure” for Macau’s beleaguered junket operators, who have borne the worst of the VIP collapse.