Observers are applauding Singapore’s cautious approach in recently licensing junket operators—called “international marketing agents” in Singapore—for the first time.
In late March, the city-state’s Casino Regulatory Authority authorized two junket companies to bring high-end customers to Resorts World Sentosa, which is operated by the Malaysia-based Genting Group.
Junkets, which bring high-rollers to casinos in exchange for a commission on the wagers, have been the driving force behind Macau’s phenomenal growth. Prized for their ability to increase business volumes, they also reduce credit risk and bad debt because they have a closer understanding of a gambler’s financial background and can collect on markers, a vital function in China, where gambling debts are not enforceable by law.
Singapore, however, is eager to avoid the taint associated with Macau’s junket networks, which authorities in some countries claim are infiltrated by organized crime. Of the 14 junket operators who applied, only two were approved for conditional one-year licenses, and the two are based in Malaysia, not China or Macau.
JP Morgan gaming analyst Joe Greff said Singapore “remains focused on allowing the market to continue to grow and evolve, while also adhering to strict local laws and regulations.”
Union Gaming Group principal Grant Govertsen, who is based in Macau, said, “The (CRA’s) language is quite forceful, suggesting licensees will be continually subjected to suitability tests upon pain of revocation. Given a very onerous licensing process, as well as the government’s traditionally cautious approach, we do not expect a flood of junket approvals in the near term.”
Meanwhile, Las Vegas Sands, owner of the city’s Marina Bay Sands mega-resort, has said it will not use junket operators for the time being. Rob Goldstein, president of global gaming operations for LVS, noted the company has been successful with a more traditional approach, “very focused on a sales team that can go direct to the customer,” he said.