Macau’s Gaming Inspection and Coordination Bureau (DICJ) has recently intensified its scrutiny of junket operations, leading to concerns within the industry.
The president of the Macau Professional Association of Gaming Promoters, U Io Hung, expressed his shock to AGB following a recent reminder issued by the DICJ, which emphasized that junkets must ensure their administrative management members and employees wear work permit badges issued by gaming operators while performing duties in the casino. Failure to comply could result in fines ranging from MOP100,000 ($12,430) to MOP500,000 ($62,150).
U Io Hung highlighted the substantial burden these fines could impose on junket operators, especially given the current commission structure. He noted that junkets earn around MOP1,250 ($155) for every MOP100,000 ($12,430) in rolling chip turnover.
To cover a maximum fine of MOP500,000, a junket would need to generate MOP40 million ($5 million) in rolling chip turnover, not accounting for other operational expenses. Even the minimum fine of MOP100,000 would require a turnover of MOP8 million ($1 million).
According to Law 16/2022, which reformed the Legal Regime for Operating Games of Chance in Casinos, using the identification card issued by the concessionaire while performing activities in casinos is one of the duties of junkets. Their collaborators, who are also required to obtain a license, are subject to this requirement as well, which carries a lighter fine of MOP50,000 ($6,215).
Junket veteran U Io Hung questioned how these fine amounts were determined, pointing out that penalties in other industries, such as real estate, are significantly lower. “Why is it that only junkets face such heavy fines?” he inquired.
This issue arises in the context of recent findings by the DICJ, which revealed unlicensed junket-like business activities within Macau casinos. Under Macau’s revised junket laws, individuals engaging in the junket business in casinos must obtain a government-issued license, and each junket can only sign an intermediary contract with one concessionaire. Additionally, junkets are no longer permitted to operate their own VIP rooms or hold revenue-sharing agreements with concessionaires.
U Io Hung also criticized the apparent inconsistency in the regulatory approach, telling AGB: “It doesn’t make sense to impose such elevated fines on licensed employees while there is no punishment for unlicensed ones. It’s like saying if you drive without a license, you won’t be punished, but if you already have your license, you may face penalties.”
“I think the responsibility to confirm the identity of the junkets belongs to the DICJ, as they should have records that can verify the qualifications of the junkets when necessary,” said U.
Only 24 junkets in Macau
Currently, Macau has 24 licensed junkets, a slight increase from the 18 reported at the beginning of the year. However, the number is still below the 36 recorded last year.
This sharp decline is part of a broader trend, with the junket sector experiencing nearly 90 percent drop over the past decade. In 2014, Macau’s casinos reached their revenue peak of over $45 billion, three times that of Las Vegas, with 235 junket operators contributing approximately 60 percent of casino revenues. In response to the sector’s contraction, the gaming regulator has set a cap of 50 junkets for 2024.
As of January this year, only nine collaborators—individuals with extensive networks to bring players to VIP rooms—are registered in Macau, with the regulator imposing an overall cap of 250 collaborators for the market.
