atans1

Why avoid Genting S’pore

In Casinos on 23/01/2014 at 4:32 am

In 2010, I wrote

The junket rules that the authorities are likely to introduce will mean a slow start for VIP (high roller) volumes at Genting Singapore, at least in the short term. The Genting gp, I understand, has always believed junket operators are the key to its VIP segment.

So the VIP gaming volumes at Sentosa will take time build up. Note that the preference for using junket operators for the VIP segment reflects the more conservative nature of the Genting gp. Bad debts are the responsibility of the operators, not the casino. In return, the operators get a bigger share of the gamblers’ spending. (https://atans1.wordpress.com/2010/01/08/genting-spore-did-you-know/)

(Or “Money laundering, casinos and junket operators”)

Genting S’pore has been missing its forecasts for some time and is no longer a favourite.

Looks like it has a problem building up its high roller biz without the help of the junket operators.

Here’s how the junket operators operator in Macau and why S’pore cannot afford to have them (emphasis is mine):

Junkets are nearly impossible to regulate: in private rooms several floors above the hordes of tourists, top clients continue to spend millions of pounds in off-the-record bets.

“Junkets are legitimate agents in Macau’s casino system,” said Philippa Symington of FTI Consulting’s Shanghai office and the author of a recent report on money laundering in Macau.

 “Their activities can stray into criminal territory. This can range from working around occasional loose regulations – for example, enabling players to avoid identification – to relying on organised crime groups to collect gambling debts.”

In some ways, money laundering is to Macau what corruption is to mainland China – ubiquitous, yet impossible to eradicate without undermining the entire economy.

China restricts the amount of money its citizens can carry abroad to about £2,000 per trip and £30,000 over a year. Macau appeals to wealthy mainlanders who, fearing scrutiny and volatility at home, may want to funnel their fortunes into overseas property markets and bank accounts.

Junkets take advance payments on the mainland and offer easy credit across the border, allowing clients to far exceed Beijing’s limits. Streets near major casinos are lined with brightly lit pawn shops selling shrink-wrapped luxury watches for thousands of pounds, which punters from the mainland buy on credit and immediately return for cash.

The 2013 annual report from the Congressional-Executive Commission on China, a US government agency, quoted an anonymous academic as saying: “Each year, $202bn in ill-gotten funds are channelled through Macau.”

http://www.theguardian.com/business/2014/jan/05/macau-gambling-tourism-money-laundering

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