Singapore Adopts Macau’s “Mini Junkets” Model

Posted: March 24, 2012 in Uncategorized

24th Mar 2012  SAT

Specialist Commentary on Local News Extracts

By:  Professional Ground’s Asian Junket Specialists Panel

Such "Mini Junkets" are merely the "Middle-tier Tour Groups" as Macau casino industry calls them... Small Fly.

Finally, the Singapore Casino Regulatory Authority (CRA) has granted two casino junket licenses to two Malaysian operators, under agreement/sponsorship by Resorts World Sentosa (RWS) casino.

However, based on reported information, this two operators are merely the “mini-junkets” standard in the big fish arena. Their capabilities are at best,

–  Conducting tour group based mid-tier casino players for casinos.

–  Lack of funding to provide larger sum of credits to players. Mainly they would provide individual (or group) credit up to SGD50,000 – SGD100,000 per trip.  Typically, such promoters could only provide regular clients small credit from SGD10,000 right up to SGD30,000 individually on each trip.

–  They DO NOT operate based on the proper Junket commission programs. They only receive from casino or a big junket room operator a so-called Chips Buy-in discount of say, 2.2% of whatever the total Front Money checked-in with casino.  This is very tiny as compared with the Proper Junket commission that’s based upon Rolling-Chips turnover.

–  In Macau, such small time operations are called the “Mid-tier Group Incentives” casino promoters.  Casinos operate under this scheme tend to maintain a larger portion of turnover Wins. Such “mini-junkets’ operators/promoters would operate based on each trip (to casino) under One single account in order to meet the minimum check-in money of SGD100,000 to be qualified as VIP status betting.  So, A Mini-junket would group together say, from 5 to 15 players as “a group” for each trip that amounts to approximately SGD500,000 right up to SGD1m – 2m maximum chip play.  Hence, they receive very tiny fixed fees/commission on each trip made. As we mentioned above, they do not entitle to the Rolling-chips programs (a norms in Macau due to real big funding from Syndicated Junkets).

–  Such mid-tier group players may be given other incentives by casino. Such as F&B coupons, ferry tickets (as in the case of Macau), discounted or free rooms, etc.

In Conclusion, Singapore authority has done very detailed scanning of Macau and Las Vegas casino junket/promoter environment and made a clever choice. By means of allowing only such “Mickey Mouse” junkets into the Singapore casino scene, it could ensure that those grey areas such as money laundering activities can be better controlled.  Also, the Mini-junkets in Singapore are not allowed to solicit business from local population. This is another extremely strict regulation in which the authority has reviewed. In Macau, many of these type of Mini-junket promoters are soliciting customers at ferry terminals and taxi stands!  They also undertake the role of loan shark in casinos.

If you still wondering why Marina Bay Sands (MBS) is still not too keen in junket operation in Singapore, the above details are the main reasons, MBS don’t need such Mini-junkets. MBS’ Paiza Club team could probably do a better job than these Mickey Mouse promoters, without giving them the chip-buy discounts…

Singapore remains the largest operating margin casino in Sands Corporation, among Macau and Las Vegas. Hence, it is to Adelson’s interest that he will continue to resist an erosion of Win margins by bringing in junkets to Singapore. Unless MBS is losing out in market share.

In North America, a similar Mini-junket system is being practised for years. Individuals operating with or employed by travel agency could register themselves as “junket” with license, bring group tour customers to casinos in Las Vegas and others in the US and receive fixed fees/commission based on total money the players check in with casino. However, US Mini-junkets don’t give (or can’t afford to) credit to players.  Casinos however, may give credit to these type of players when they become regular clients. It is highly and most likely that Singapore is going down the same route. Such Mini-junkets are easier to managed.

Therefore, there’s no great change to Singapore casino landscape as yet.  Some Pseudo-junkets from overseas (unlicensed) would continue to operate undercover…

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Comments
  1. Casino Junkets are the way to go, excellent article thanks.

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