CNMI Casino Commission Approves Junket Operator Rules

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

Tour companies expected to bring high rollers to gamble

By Dennis B. Chan

SAIPAN, CNMI (Saipan Tribune, Jan. 6, 2016) – The Commonwealth Casino Commission has approved regulations and guidelines for junket operators who are expected to bring high rollers to gamble at the Saipan casino. Applications for junket license have been finalized and released to Best Sunshine International, Ltd., the owners of the Saipan casino, and other parties, commission executive director Edward C Deleon Guerrero said yesterday, and they are anticipating applications soon.

It’s believed that for a casino to be truly successful on Saipan, Tinian, and Rota, the CNMI would need extensive marketing effort—or in the gaming world—a good well-managed, well-regulated junket operations.

"Because they would be the one bringing in the players," Guerrero told Saipan Tribune yesterday. "These are the large VIP players."

"The success of Best Sunshine, or the [Tinian] Dynasty, or Alter City [Group] or any other" casino in this part of the world is "through this program, the junket," said Guerrero. "Basically, they are the travel agency going around the world to get VIPs to come to Saipan."

These junket operators could easily bring gamers to Manila, Singapore, or other gaming areas around the world, Guerrero said, but if they choose Saipan, both Best Sunshine and the CNMI has to make this experience possible.

In an interview yesterday, Guerroro noted one of the difference between the Macau junket operations and the one Best Sunshine would have.

"In some places in Macau, the junket operator takes over the VIP room," said Guerrero. "They actually in a sense run the casino. Here, we do not allow that. The junket operator cannot take over a VIP room—it would have to be Best Sunshine and Best Sunshine’s approved and licensed dealers and pit boss that are operating the casino."

"We do not allow any outside entity to run the casino, or the VIP room, other than the licensee," added Guerrero. "That’s one difference between us and Macau."

In ushering the casino industry and the junket operators—seen as the industry’s gaming middlemen—the Commonwealth could look to two stark contrasts in how junkets are run, in Singapore and Macau.

Macau casinos have become extremely reliant on the VIP high-roller sector, which accounts for more than 70 percent of revenue, according to Reuters "Factbook" in recent years. VIP junket operators, also known as VIP room promoters, act as facilitators for Macau’s billion-dollar casinos, guaranteeing a certain amount of revenue from China’s wealthy gamblers, luring them with free accommodation, travel and other perks in Macau, the only place in China where casino gamble is legal.

Macau’s six licensed casino operators—Wynn Macau Ltd. (1128.HK), Sands China Ltd (1928.HK), Galaxy Entertainment Group Ltd (0027.HK), SJM Holdings Ltd (0880.HK), MGM China Holdings Ltd (2282.HK), and Melco Crown Entertainment Ltd (MPEL.O)—provide gaming facilities, dealers, chips, and a monthly commission to VIP junket operators in return for a minimum guaranteed rolling chip turnover per month.

Singapore, however, according to a Reuters report last April, wants nothing to do with the often questionable gaming middlemen who proliferate in Macau, in making its decision to cut out junkets. The gambling houses in Macau get around China’s currency controls by relying on so-called junket operators to extend credit to mainland high rollers, a business model that has been linked to organized crime groups known as triads, says Steve Vickers, chief executive officer at risk consultant Steve Vickers & Associates.

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