Macau Outlines New Penalties for Offending Junkets

Macau Outlines New Penalties for Offending Junkets

Macau is not going to back down from regulating junket operators. Companies who engage in such activities would be held liable for various offenses to be inscribed in a new law and participants in junket operations would have to be on the straight and narrow to avoid what is possibly jail sentences. One of the provisions governing junkets moving forward will be imprisonment for any junket representatives who may have accepted illegal payments.

Fines and Jail Time for Wrongdoers

A fine of MOP1.5 million ($200,000) will also apply. This provision, and others, will be passed with the “Legal Framework for Operating Games of Chance in Casinos.” The draft law seeks to set the operational norms and limitations when dealing with junket operators and targets both the casino concessionaires as well as the company running junkets.

The new law will also be replacing Administrative Regulation 6/2002, which is dated guidance on how junket operators should be regulated and establishing some early-day punishments for criminal offenses. The new law is far more encompassing and fairer it seems, as the fine imposed may be kept fairly low at MOP10,000 ($1,250). These penalties will apply only in specific cases.

Junkets will also no longer be able to share gaming revenue with concessionaires. Branded and private areas that are operated by the concessionaires on casino floors will also be prohibited, which means that high rollers will no longer be offered to sit in private lounges run by the promoters.

Each junket will also have to face a MOP10 million ($1.25 million) cash requirement that is obligatory for any business to run as a junket. Each contract will expire on December 31 every calendar year after which junkets and concessionaires would have to negotiate new terms or agree to extend the existing deal. Some operators have already chosen to shutter operations.

More Red Tape for the Sake of Transparency

This may create more red tape, but it will also allow concessionaires to stay on top of their junket operators and see what they are up to. Some casinos, such as Melco and Sands Macau have decided to sever ties with junkets as they have deemed these changes too much trouble to go through.

The overall number of junkets has fallen as well following the Suncity Group debacle and the growing regulatory pressure. Macau’s gambling regulator will also look into the activities of junkets and any participant or related third parties and act accordingly every time suspicious behavior is identified. Unlawful dealings with sanctioned persons or criminal syndicates will be punished with the full force of the law.

While there are more rough edges to sort out, junket operators are being transformed in a sweeping manner that should ensure their fairness and transparency moving forward.

Author: Ian Douglas