Phone betting ban likely in Macau

Sources citing an official DICJ/Finance Department instruction have said that phone betting is likely to be banned in Macau, perhaps as early as next week. The instruction is believed to have been delivered, or will be delivered to all Macau operators.

Phone betting is the practice of an agent (junket) or third party placing a live wager in a VIP room on behalf of a client making a bet over a mobile device/phone. In many instances the player will watch the results streaming live.

The ban does not specifically ban proxy betting, but rather bans the use of mobile phones at any gaming table in Macau. 

Although operators do not break out phone betting revenue in their VIP segments, analysts at Sterne Agee believe that phone betting accounts for 5-10 percent of VIP revenue. Some disruption to VIP business is expected, although the EBITDA impact is likely to be relatively small given the thin VIP margins. For example, Sterne Agee projects that the lack of phone betting will negatively impact Wynn Macau by around -$5 million per quarter.

According to Union Gaming, the announcement would have come at a surprise to junket operators as it was not a talking point between the junket community and the gaming regulator. It yet to be determined how the ban will be enforced, but Union Gaming analysts say it will likely be up to the casino concessionaries to self-enforce the ban. 

Las Vegas Sands is the only operator in Macau not to offer phone betting, having put a stop to the practice in October CY14 citing Know Your Customer (“KYC”) rules. Wynn Macau also stopped the practice around the same time, but restarted it in 15H1.

It is believed that some of the phone betting revenue is going to countries such as the Philippines, where Melco Crown Entertainment has a presence.