Macau Regulator Defends Separate Roles For Casinos And Junkets

The Gaming Inspection and Coordination Bureau in Macau has denied accusations that the directly operated VIP business of casino companies is in competition with gambling promoters. In the written statement, the regulatory body has stated that the concessionaires and junkets have different duties and operate cooperatively.

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The reply was signed by Acting DICJ Director Lio Chi Chong on August 12 and addressed questions from lawmaker Chan Hao Weng. Chan had called for a review of Macau’s junket regulations, arguing that the expansion of directly managed VIP services had reduced customer channels available to junkets.

Distinct Roles Under Macau Law

Lio stated that only the casino concessionaries have the license to conduct casino gaming activities. The gambling promoters, who are also referred to as “junkets,” help in recruiting players.

Junkets receive commissions from concessionaires for those services. Under Macau law, each gaming promoter may work with only 1 concessionaire and cannot share casino revenue or participate directly or indirectly in casino operations.

The DICJ said gaming promoters assist concessionaires by attracting gamblers and promoting their businesses. It maintained that the roles of the 2 sides do not overlap and therefore do not constitute a competitive relationship.

Lawmaker Seeks Rule Changes

Chan said concessionaires’ directly managed VIP operations had narrowed the channels through which junkets could attract customers. He also described the situation as creating an uneven competitive environment.

Citing DICJ data, Chan said Macau had 29 licensed junkets as of July. That represented 58% of the ceiling of 50 set for 2027.

The lawmaker urged the government to relax the restriction limiting each junket to 1 concessionaire. He also called for a reduction in the 5% tax imposed on junket commissions.

Commission And Tax Limits

A dispatch that took effect in January 2023 caps junket commissions at 1.25% of total net rolling-chip turnover. Benefits provided directly or indirectly to junkets by concessionaires or related companies are also included in that ceiling.

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Junkets must currently pay a 5% tax on commission income, with no exemptions. The rules set both a limit on commissions and a tax requirement for licensed gaming promoters.

The current framework is based on exclusivity and a ban on revenue sharing. The DICJ said these principles allow junkets to focus on bringing players to concessionaires while keeping their activities separate from casino operations.

DICJ Defends Current Framework

Lio defended the existing arrangements, saying the rules were intended to support the industry’s development in a sound and reasonable direction. He also said the framework would help prevent another period of excessive and disorderly expansion.

The acting director did not commit to reviewing the 5% tax or relaxing the 1-concessionaire requirement. The reply left both of Chan’s requested changes without a stated policy commitment from the regulator.

The DICJ instead emphasized the existing structure governing the relationship between concessionaires and junkets. Its position is that the parties cooperate rather than compete, even as concessionaires expand directly managed VIP services.

Continued Monitoring Planned

The DICJ said it would continue monitoring the junket industry and regional gaming policies. It will respond when necessary and supervise concessionaires and gaming promoters to ensure taxes are paid according to the law.

The regulator’s response keeps the current exclusivity rule, commission ceiling, and 5% tax in place. It also confirms that Macau will continue distinguishing between concessionaires authorized to operate casinos and junkets responsible for attracting players and providing related services.

The DICJ will continue overseeing the sector while maintaining that casino operators and licensed gaming promoters have separate functions rather than a competitive relationship.

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Source: Asia Gaming Brief