Officials in Macau have revived hopes that the government would counter cutthroat competition in the VIP gaming segment by mandating a long-awaited cap on the commissions casinos pay to junket agents. Executive Council spokesman Tong Chi-kin said that in light of the increasingly heated commission war among casinos it was necessary for the government to introduce anti-competition measures such as a commission cap. He said the council was discussing measures that could be implemented within 30 days of approval and would be enforced with fines of up to 500,000 patacas or, in serious cases, by suspending or revoking junket licences. Susquehanna International Group gaming analyst Robert LaFleur wrote in a research note: 'This a positive step, as it formally sets out rules and regulations for violating the junket cap. The government taking a more proactive step toward enforcing the junket caps is also a positive.' Junkets involve middlemen who bring high-rollers to casinos, issue them credit for gambling and collect their debts. In exchange, they are paid a commission that, at the high end, can equal 1.35 per cent of VIP chip wagers or some 47 per cent of a casino's expected net winnings from high-stakes play. The prospect of a government cap on junket commissions was first raised by Chief Executive Edmund Ho Hau-wah 16 months ago. In July last year, Secretary for Economy and Finance Francis Tam Pak-yuen said the government was moving forward to cap commissions at 1.25 per cent of VIP wagers and that formal rules would be implemented within one month, but no legislation has materialised. Casino executives have always supported the idea of a cap, as it would increase their profit margins on VIP gaming, which accounts for more than 60 per cent of all casino revenue in Macau. The challenge has been working out how to enforce such a measure among Macau's six licensed casino operators, 200 or so licensed junket agents and 4,000-plus unlicensed and unregulated junket 'sub-agents'. In April, Las Vegas Sands Corporation chairman and chief executive Sheldon Adelson attended a meeting of the newly established Chamber of Macau Casino Gaming Concessionaires and Subconcessionaires where operators agreed in principle to support a cap on junket commissions. 'When I was there I committed to do it on the honour system, the breach of which will be reason to beat people up with a wet spaghetti noodle,' Mr Adelson joked last week. Rival Wynn Resorts chairman Steve Wynn said last week: 'The caps area a good idea. The question is will the government enforce them, or will they leave it to us?' Wednesday's announcement by the Executive Council appears intended to answer that question. Spokesman Mr Tong said the council intended to implement a cap through an amendment to an existing administrative regulation. Macau's administrative regulations do not carry the weight of formal law, but are seen as stronger than administrative orders issued by the chief executive. However, the courts have, in some cases, cast doubt on their legality. In 2006 and 2007, the Court of Second Instance found that two administrative regulations had no effect, as they were in conflict with Macau's laws. Junkets currently pass on a chunk of their commission to players as a rebate to retain business and encourage gambling. Following implementation of a cap, junkets are expected to rely more on service quality and their ability to make gambling credit available to players. 'Junkets will have to offer comprehensive and quality services, and in some cases may need to provide adequate credit to customers,' Amax Entertainment chairman Brian Cheung Nam-chung said. His firm controls a majority stake in a registered junket operation at Melco Crown Entertainment's Altira casino hotel and receives a maximum commission of 1.35 per cent, which would have to be renegotiated following implementation of a cap. But he was not opposed to a cap.