Did the gambling junkets really managed to outwit the Singapore government? Or is it really the Singapore government closing an eye to these happenings to allow the two casinos to thrive here.
http://expertir.wordpress.com/2010/06/07/junkets-sidestep-the-ir-casino-rules/
Junkets ‘sidestep’ Singapore’s supposedly tough rules on VIP credit
Three separate gaming industry sources have suggested to Asian Gaming Intelligence that Macau junket representatives are getting around Singapore’s tough financial reporting rules with a relatively simple ruse.
It involves off duty junket reps checking in to the Singapore integrated resorts as individual VIPs and then giving their chips to ‘friends’. The allegation is that these ‘friends’ also happen to be customers of Macau junkets.
That would mean the off duty junket person was acting like an on-duty junket operator, but without the rigorous probity checks required by the Singapore government. How would the Singapore gaming regulators react to that and how would they police it, if at all?
One of the sources familiar with this reported trade described it like this: “There are several scenarios so far. One involves the junket representative bringing cash into Singapore as a private individual and as the ‘identified player’. He then draws down the chips from the casino and passes them to his ‘friends’ to play with. He gets the rolling on the chips and shares them with the players, aka his ‘friends’.
“What it means in practice is that junkets are operating in Singapore, whatever the regulations say about background checks. It’s a grey area as there is nothing in the CRA regulations to say a customer cannot pass chips to his friends,” adds the source.
Would the method described above actually be illegal under Singapore’s Casino Control Act (CCA) and its supporting casino credit regulations? It’s clear that it would break the spirit of the regulations, but intention and enforcement are two different things.
Singapore has in theory closed the door to Macau-style junkets by requiring very stringent checks on the personal probity of junket applicants, their staff and clients, including the source of the junkets’ working capital. The Singapore authorities haven’t publicly explained their rationale for this, but the assumption in the industry is that they are not satisfied in all cases that existing Asian junkets, and Macau junkets in particular, are necessarily free of links to, or influence from, organised crime.
AGI has looked at the wording of the applicable Singapore law and the accompanying credit regulations, and can find no reference to any rule to prevent private VIP players from sharing chips with friends.
There could also be the small matter of potential tax avoidance. A bona fide individual VIP checking in a minimum of SD100,000 for personal use is entitled under Singapore law to pay a discounted tax rate on the gross of five percent gaming tax (plus seven percent GST). But were an off duty junket rep to pass those chips to several ‘friends,’ each ‘friend’ would be playing with chips valued below the VIP check in level. Those people should in theory not then be classified as premium players but as ‘mass market’ players and their play should be taxed at 15% of the gross (plus GST).
An interesting question is would the burden of proof be on the individual VIP customer checking in to prove he or she was a bona fide ‘individual’ and not acting in the capacity of a junket rep, or would the burden of proof be on Singapore’s Casino Regulatory Authority to prove the person was a junket rep in disguise? One wonders also whether the Singapore authorities went to the trouble of ‘stress-testing’ their junket regulations with a consultant with inside knowledge of junket operations before passing them into law. That would certainly have been a valuable exercise, given Asian junkets’ reputation across the industry for what might charitably be called creative thinking. We await with interest the CRA’s response to these claims.
http://expertir.wordpress.com/2010/06/07/junkets-sidestep-the-ir-casino-rules/
Junkets ‘sidestep’ Singapore’s supposedly tough rules on VIP credit
Three separate gaming industry sources have suggested to Asian Gaming Intelligence that Macau junket representatives are getting around Singapore’s tough financial reporting rules with a relatively simple ruse.
It involves off duty junket reps checking in to the Singapore integrated resorts as individual VIPs and then giving their chips to ‘friends’. The allegation is that these ‘friends’ also happen to be customers of Macau junkets.
That would mean the off duty junket person was acting like an on-duty junket operator, but without the rigorous probity checks required by the Singapore government. How would the Singapore gaming regulators react to that and how would they police it, if at all?
One of the sources familiar with this reported trade described it like this: “There are several scenarios so far. One involves the junket representative bringing cash into Singapore as a private individual and as the ‘identified player’. He then draws down the chips from the casino and passes them to his ‘friends’ to play with. He gets the rolling on the chips and shares them with the players, aka his ‘friends’.
“What it means in practice is that junkets are operating in Singapore, whatever the regulations say about background checks. It’s a grey area as there is nothing in the CRA regulations to say a customer cannot pass chips to his friends,” adds the source.
Would the method described above actually be illegal under Singapore’s Casino Control Act (CCA) and its supporting casino credit regulations? It’s clear that it would break the spirit of the regulations, but intention and enforcement are two different things.
Singapore has in theory closed the door to Macau-style junkets by requiring very stringent checks on the personal probity of junket applicants, their staff and clients, including the source of the junkets’ working capital. The Singapore authorities haven’t publicly explained their rationale for this, but the assumption in the industry is that they are not satisfied in all cases that existing Asian junkets, and Macau junkets in particular, are necessarily free of links to, or influence from, organised crime.
AGI has looked at the wording of the applicable Singapore law and the accompanying credit regulations, and can find no reference to any rule to prevent private VIP players from sharing chips with friends.
There could also be the small matter of potential tax avoidance. A bona fide individual VIP checking in a minimum of SD100,000 for personal use is entitled under Singapore law to pay a discounted tax rate on the gross of five percent gaming tax (plus seven percent GST). But were an off duty junket rep to pass those chips to several ‘friends,’ each ‘friend’ would be playing with chips valued below the VIP check in level. Those people should in theory not then be classified as premium players but as ‘mass market’ players and their play should be taxed at 15% of the gross (plus GST).
An interesting question is would the burden of proof be on the individual VIP customer checking in to prove he or she was a bona fide ‘individual’ and not acting in the capacity of a junket rep, or would the burden of proof be on Singapore’s Casino Regulatory Authority to prove the person was a junket rep in disguise? One wonders also whether the Singapore authorities went to the trouble of ‘stress-testing’ their junket regulations with a consultant with inside knowledge of junket operations before passing them into law. That would certainly have been a valuable exercise, given Asian junkets’ reputation across the industry for what might charitably be called creative thinking. We await with interest the CRA’s response to these claims.
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