The use of the VIP operators in Macau helps casinos there avoid problems of unpaid balances, since it is the junket operators advancing credit, not the casinos. Since China doesn’t recognize gambling debts, VIP operators play an important role.
In Singapore, where the regulations make it difficult to work with Macau-style junket operators, the incidence of Chinese players skipping on their debts is becoming an increasing concern for investors. Three years after the opening of the two casinos, Chinese gamblers account for 50 percent of the VIP revenue at the two casinos. And because no Macau VIP operator has been approved by the Singapore regulators, the casinos themselves grant credit to the Chinese gamblers—and are left holding the bag should they skip on payment.
An investigation by news organization Reuters has revealed that the problem is larger than the casinos had previously indicated, with several individuals who have piled up millions in debt to the casinos.
To be sure, however, the amount owed is small when compared with the $5.9 billion in gross gaming revenue earned by the two Singapore casinos last year, just shy of the $6.2 billion earned by all the casinos on the Las Vegas Strip.
