Macau Government Sets VIP Rate
The government of the Macau Special Administrative Region has set regulations that would control the portion of the gambling money deposited by their clients in the Macau casinos. Currently, commissions can be set by the individual casinos at their own risk. But several casino companies have reached agreements capping the payments at 1.25 percent applied to the “rolling chip” volume, which accounts for 42 percent of the casino win, the same level the government is mandating. The new rules will take effect on September 9.
Prior to the liberalization of gaming in Macau in 2002, the industry controlled by Stanley Ho had paid just 0.8 percent. That rate rose to 1.35 percent as competition got super-heated.
The implementation of the commission cap is designed to level the playing field so that all six casino operators in the SAR can concentrate on their products, not on the payments to the VIPs. The SAR regulations set fines and penalties of between 100,000 patacas (US$12,658) and 500,000 patacas (U$63,291) to any casino violating the policies.
The commission cap is being implemented during a time when the six operators have agreed to join forces in a gaming association, Chamber of Macao Casino Gaming Concessionaires and Sub-concessionaires, and have agreed to work together for the good of the industry.
While this would seem to be good news for the operators, some observers believe competition will only be masked. Some complain that the penalties for violating the cap aren’t strong enough and that there are other ways to get around a cap that haven’t been addressed. Penalties would also be applied to the licensed junket operators, who could have their license suspended for up to six months or even revoked.
