Open-hand… Singapore Junkets Control Measure

Posted: January 22, 2010 in Uncategorized

Initial Assessment – Singapore Casino Control (Junkets) Regulation 2009
 
Commentary by:  Expert IR    22nd Jan 2010    

Two most important clauses of the Singapore Casino Control (Junkets) Regulation will create the most impact to the two Integrated Resorts: 

(1)  Clause 27.  Credit to Junket Players (and among Junkets).  (To follow the authority’s guideline and no credits for Singaporean VIPs and locals.).

(2)  Clause 39 Airport Arrival (Tracking of Junket/premium Players’ identity & movements).
 
The above two clauses could potentially “Kill” the junket business. We have not come across any junket player who wishes to be monitored so closely with personal identity and movements being tracked by the authority. So, will they come?
 
Also, we sense that the authority is NOT in favour of junket operations to take root in Singapore IRs.
It is clear that the authority prefers the casinos to cultivate their “own” direct VIP players instead. And that is a difficult task for many casinos, especially in Asia. It is unless casinos are willing to bear greater credit risk. (But casinos are lacking collection power).
 
The regulation will force IR casinos to pay full attention on Mass market gamblers instead. And the impact on locals will be high, as the tourism traffic can’t provide the overall projected casino revenue!

It is envisaged the regulation will have a high impact on casinos’ VIP gaming business,
 
Clause 27; is to restrict junket & control credits (& casino credit likewise) for junket players.  Any regulatory control on credits will turn away VIP players. And it is believed that the players’ identity would also be “compromised” in the process of administering the credit in accordance with the regulation. 
 
Clause 39; regardless whether it is one hour or one week of advance notice (of arrival of VIP players) to the authority, the fact remains that players’ identity and movements are being closely tracked by the authority and the information is with the government’s database! So, will China VIP market segments (Junket or Direct alike) be attracted to Singapore and bear higher and apparent risks?
 
This is the first indication that the authority does not “encourage” junket style VIP players. Rather, they hope to push the casinos to work harder on direct channel of VIP customer acquisition.

This regulation imposes a tight control measure for junkets operating with Singapore IRs.
In reality, the
direct premium/VIP play remains a rare commodity in Asian casino context and it is still not a platform to achieve VIP gaming high turnover.

Basically, junkets will find it hard to survive in this “water”… that will force the casinos to work harder on direct premium players and also, to bear high credit risk in order to sustain VIP gaming revenue.

 

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