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Twelve other applications rejected, reflecting the government’s stringent standards
By GRACE LEONG
24 March 2012
The wait is finally over for Resorts World Sentosa, which yesterday received government approval for two junket licence applications it endorsed nearly two years ago.
But even as Singapore allows the first licensed junket operators onto the gaming scene - which potentially fuels gaming revenue growth here - 12 other applications were rejected, signalling the government’s stringent stance.
This comes at a time when Singapore’s Casino Regulatory Authority (CRA) is tightening junket regulations in a bid to make the industry, which transacts large sums of money, even more transparent and accountable.
International market agents (IMAs), or so-called junket promoters, can extend credit to highrollers or organise trips for them to play at the casino in exchange for commissions.
The CRA yesterday awarded two one-year licences to Huang Yu Kiung and Low Chong Aun, two Malaysian IMAs with an international clientele. But their licences with RWS, which took effect yesterday and are set to expire on March 21, 2013, may be revoked if the two fail to remain suitable.
An RWS spokeswoman said the casino operator is ‘delighted’ with the licensing of IMAs in Singapore.
‘The addition of IMA business for the overseas VIP market will bring a progressive new source of high net-worth play into our gaming environment,’ she said.
This will bring economic benefits for both Resorts World Sentosa and Singapore. RWS will work closely with the authorities to comply with Singapore’s junket regulations in its execution, she said.
A Marina Bay Sands spokesperson said it looks forward to learning more, but will not be providing further comments at this time.
BT understands MBS hasn’t endorsed any junket licence applications. But Robert Goldstein, Las Vegas Sands’ president of global gaming operations, recently indicated to investors it is keen to participate, once a structured junket industry is approved in Singapore.
CRA didn’t specify how many local and overseas applications it received to date, but said it is currently evaluating other applications and conducting probity checks to determine the applicants’ financial soundness, sources of funds, as well as the suitability of its employees and associates.
The changes are part of an ongoing review of the Casino Control Act, which will be amended over the next few months.
Key among amendments to the Casino Control (Junkets) Regulations 2009, is a requirement that the licensed junket operators bring in only international highrollers to the two casinos.
‘We have decided to use the term, IMAs, to more accurately describe what these agents do. They will focus on bringing in foreign highrollers to our casinos, and they will not target our locals,’ CRA Chief Executive Lau Peet Meng said.
‘CRA has put in place a tight regulatory regime for the IMAs, and we have every intent to exercise our powers to ensure the casino operators and IMAs comply fully with our regulatory requirements,’ he said.
To ensure better governance, the new rules now require more extensive financial reporting and credit assessment by IMAs. In addition to endorsing the junket licence application, the casino operator also has to provide a due diligence report to support the application.
In other words, the new rules place greater onus on the casino operator to ensure its arrangement with the junket operator won’t compromise the integrity, stability and credibility of its operations.
If the casino operator fails to exercise due diligence, it will be liable for disciplinary action, and the penalty will depend on the severity of the breach.
Also setting Singapore apart from other gaming jurisdictions is a new rule that prohibits commission sharing among junket operators.
The CRA also has the discretion to stop granting licences to junket operators if it’s deemed to be in the public interest. This is aimed at encouraging casino operators to be careful about the junket operators they endorse. Previously, there were no laws limiting the number of junket licences granted.
To ensure that casino operations are not compromised, the CRA will have the power to suspend the IMA licence at any time if it deems necessary. For instance, junket operators that are being investigated for regulatory breaches or criminal offences may have their licences suspended even before the end of the probe. While their licences are suspended, these IMAs cannot operate.
While junket operators are expected to conduct debt collection through legal means, the regulations to date do not prescribe what those methods are.
One industry source said that he isn’t surprised by the tightening of junket regulations and that licensing IMAs may lead to more self-policing within the industry.
‘Prohibiting sharing of commissions is good because it ensures the integrity of the business, and if the junket operators violate that, they know it’s game over,’ a Singapore gaming analyst said. ‘There’s more political will to make sure that the integrity of the Singapore casino market is maintained, compared with other jurisdictions like, say, Macau.’
A junket source agreed. ‘The probity checks will be meaningless if licensed junkets can work with unlicensed third parties, which is happening a lot in Macau,’ he said.