Changes in the junket business in Macao after gaming liberalization

Abstract

Before Macao's gaming liberalization, people from Macao and Hong Kong took the active lead as junket operators to entice high-betting gamblers from neighbouring places. With the People's Republic of China as the dominating source of visitors to Macao, there have been some changes in the junket business. The qualitative research interview was adopted due to the under-researched nature of the junket business. This study is based on the institutional theory to analyse human interactions and activities structured in terms of overt or implicit rules involved in the junket business in Macao. A review of the literature and interview findings indicates that the active role played by local people appears to have diminished. As junket activities like patron recruitment and gambling debt collection are primarily conducted in Mainland China, together with the business opportunities from gambling and junket operators' preference for working with ethnically homogeneous groups, the previous active role played by local people is gradually being replaced by the Mainland Chinese. The junket business in Macao has been under the increasing influence of the Mainland Chinese. Based upon this, Macao needs to consider how to better regulate these junket operators.

Keywords:

• China
• credit
• gambling
• Macau
• regulation

Acknowledgements

The author is grateful to Prof. Blaszczynski, Dr Gainsbury, and Prof. Angela Cheater, together with the anonymous reviewers for their constructive comments on an earlier version of this paper. This research project is sponsored by Macao Polytechnic Institute.

Notes

^1. Non-negotiable chips, or ‘dead chips’, are played until they are lost; when patrons win, they are paid in negotiable or ‘cash’ chips that are redeemable. Nonnegotiable chips are also called ‘rolling-chips’.

^2. Interview with Macao junket executive 2 (November 2011).

^3. Net wins refer to the amount resulting from deducting all gaming losses from all wins.

^4. Rolling-chip turnover refers to the sale of non-negotiable chips. Bets are wagered with non-negotiable chips and winning bets are paid out by casinos in ‘cash chips’. Baccarat averages a house advantage of about 1.4%, and each non-negotiable chip lasts about 2.0 wagers; thus the theoretical win as a percentage of rolling-chip turnover is about 2.8%.

^5. Interview with Macao junket executive 4 (March, 2012).

^6. Interview with Macao junket executive 2 (November 2011).

^7. Interview with Macao junket executive 4 (March, 2012) indicated that the minimum monthly rolling-chip turnover threshold for a gaming table in a major property was at least US$6.25 million.

^8. The information can be found on the website of the DICJ and the link is: http://www.dicj.gov.mo/web/en/services/junket/formalities/Service-0003.html

^9. Interview with Macao junket executive 3 (January 2012).

Additional information

Notes on contributors

Carlos Siu Lam

Carlos Siu Lam is the associate professor at Gaming Teaching and Research Centre of Macao Polytechnic Institute in Macao. He has been a visiting scholar to the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. His current research interest is in the gaming industry of Macao.