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CRA awards licences to two junket operators
By Imelda Saad | Posted: 22 March 2012 1833 hrs
SINGAPORE: Singapore's Casino Regulatory Authority (CRA) has awarded junket licences to two Malaysian operators to allow casino operators here to extend their international reach.
This is the first time the CRA has granted the licence even as junket rules are tightened to ensure the operators do not target locals and permanent residents.
Huang Yu Kiung and Low Chong Aun - both Malaysian operators with an international client base - were issued junket licences after a series of stringent checks which lasted more than a year.
Both are endorsed by Resorts World Sentosa, and their licences are valid for only a year. Marina Bay Sands said it has not yet endorsed any junket operator.
Twelve other operators were rejected. But the CRA said it is currently evaluating a few other applications and is in the midst of conducting probity checks for these applications.
Junket operators are essentially "tour agents" for high rollers. They offer perks such as free stays and travel by private jet to entice these clients to casinos. In turn, the operators receive commission from the casinos.
Authorities said junket operators have to comply with strict rules in Singapore as they are meant to "supplement" and not "dominate" the casino market.
The CRA said the regime to regulate the junket operators has "been enhanced to ensure that our gaming environment continues to be tightly regulated and free from criminal influence".
It added that such operators "may also extend credit to their patrons. As they transact large sums of money, it is important that they are tightly regulated."
Before the junket operators receive their licences, they are subjected to checks such as on-site visits. Interviews are conducted and their financial accounts scrutinised to verify their sources of funding.
The law has also been tightened with rules and terms unique to Singapore.
Among them:
- junket operators are referred to as International Market Agents (IMAs) - a reference to the fact that these agents should target only the international market and not Singaporeans or permanent residents;
- greater onus is placed on casino operators, which have to submit a due diligence report on the IMAs when endorsing them;
- casino operators are also responsible for the activities of these IMAs;
- licensed IMAs cannot share commission with unlicensed ones; and
- the Casino Regulatory Authority has the power to stop issuing licences if it is in the public interest to do so.
Chief executive of the CRA, Mr Lau Peet Meng said: "We have decided to use the term 'International Market Agents (IMAs)' to more accurately describe what these agents do. They will focus on bringing in foreign high rollers to our casinos, and they will not target our locals.
"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."
The changes to the law are the first since rules on junkets were introduced in 2009 and they come after extensive whole-of-government discussions. Authorities also studied the trends in developments of casinos in jurisdictions like Macau, Australia and the US.
Hri Kumar Nair, chairman of the Government Parliamentary Committee (GPC) for Law and Home Affairs, said: "This is very new to us. We will probably have to work things out as we go along...It's a need to strike a balance between attracting the international market, particularly the high rollers, and also protecting Singaporeans and permanent residents from the ills of casino operations. It's a question of finding the balance and having a strict regulatory climate particularly when it comes to junket operations."
"...the fact that you have the Casino Regulatory Authority and the casino operator involved, the licences are short and that we are issuing only two licences, I think it's a good start. It enables us to assess the ground, assess the operations and then see if we could expand, going forward," he added.
Resorts World Sentosa said it is "delighted" by the issuance of junket licences.
A Resorts World Sentosa spokesperson said: "We are delighted with the licensing of International Market Agents 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. 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."
As for Marina Bay Sands, a spokesperson said: "We are interested in learning more but we will not be providing further comment at this time."
Authorities said they have taken a conservative approach to ensure that Singapore has a robust regulatory regime.
Further changes to the Casino Control Act are expected to ensure social safeguards are in place. For example, there are plans to amend the Act to state clearly that junket operators should not target Singaporeans.
- CNA/cc/ir
