Junkets piling into Macau's VIP gaming sector
The number of officially licensed VIP gambling junket agents in Macau rose to a record 219 companies and individuals last year, up 13 per cent from 2010, according to annual data released yesterday by the local gambling regulator.
Loosely regulated junkets piled into Macau's VIP segment, enticed by the growing availability of cheap or free credit and the huge commissions they can earn from casinos on the gambling turnover generated by their high-rolling clients.
That helped push overall casino revenue to a record 267.87 billion patacas, up 42.2 per cent from 2010 and more than five times the casino revenue of the Las Vegas Strip.
VIP baccarat accounted for 73.2 per cent of all casino revenue, or 196.13 billion patacas, and is a segment dominated by junket agents-the middlemen who bring high-stakes players to casinos, issue them with credit and collect their debts in exchange for a hefty commission.
Macau's 219 registered junkets at the end of last year compare with 193 at the end of 2010, according to figures from the Macau Gaming Inspection and Coordination Bureau.
By contrast, industry estimates of the number of unlicensed junkets working in Macau under the umbrella of those who are officially registered range widely, from several thousand to more than 10,000.
Licensed junkets are required to pass 'suitability' checks in Macau, as well as internal background screening by the individual casino companies.
In addition, junkets that are officially registered in Macau may also be subjected to probity checks by overseas gaming regulators in the US, Australia and other jurisdictions, depending on where else the relevant Macau casino owner has operations.
Unlicensed junkets - which share a cut of the commission with registered agents in exchange for bringing in more players and issuing credit - face no such regulatory scrutiny.
In many cases, and especially on the mainland, junkets resort to extrajudicial measures in order to collect casino debts from players. Unlike in Hong Kong, Macau or Singapore, casino debt is not enforceable via the courts on the mainland.
Still, official registrations tend to track fluctuations in Macau's VIP gaming segment. Licensed junkets previously peaked at 186 in 2007, only to fall to 156 at the end of 2008 with the onset of the financial crisis.
By the end of 2009, when Macau had started to rebound, the number rose to 169 registered junkets. Macau had 34 casinos at the end of last year, meaning each property had on average around six licensed junkets, based on the latest figures.
In US dollars, Macau's record gaming revenue for a single month, set in October. It is expected to be beaten this month