Change in the air for junket sector

Macau’s junket sector, which has been under pressure due to falling VIP revenue and a series of scandals, now faces government reform. Regulations on Macau’s gaming promoters were passed initially in 2002. Then in 2004 casinos and promoters were authorized to grant credit. Competition for promoters then became quite intense and, as a result, the commissions payable to them rose to the point where a cap had to be imposed by law in 2009, which was set at 1.25 percent of net rolling revenue. Recently, the situation has been changing fast. The casino mass market is still generally rising. However, after peaking in 2013, since 2014 the revenue of the VIP sector has been slowing, due to a series of factors. These include a general economic downturn, a tightened smoke ban in Macau, and more anti-money laundering controls and enforcement in mainland China on the flow of funds. As a result, the...

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