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Global casino operators rely heavily on Chinese VIP gamblers who are known to spend millions of dollars in a gambling spree at their casinos.
A lot of casino operators tie up with junket operators who are responsible for bringing over VIP gamblers from Mainland China.
Las Vegas Sands Corp, MGM Resorts, Wynn Resorts and Crown Resorts are just some of the top players who make a significant percentage of their revenue from the VIP gambling market which is mostly made up of Chinese gamblers.
Foreign casino operators roll out the red carpet and offer Chinese VIP gamblers loads of perks to get them to visit their casinos and play at their tables.
China has been keep a close watch on funds leaving the country via VIP gamblers and has not been happy to see so much currency leaving its borders. Beijing is now pushing a new gambling law that will criminalize luring Chinese gamblers to overseas casinos.
The Standing Committee of the National People’s Congress pushed through a second reading of this new law earlier this week which criminalizes the organizing and soliciting of VIP players by overseas casinos. There is no clear indication as of now as to what penalties will be imposed on those who breach this new gaming law.
Casino operators and junket operators will be paying special attention to this new proposal as it can significantly cramp their business model going forward.
Proposed Law Will Not Be Applicable To Macau
All forms of gambling are banned in Mainland China and the only place gambling is permitted is in the Macau peninsula which is an hour away by ferry from Guangzhou and Hong Kong. Macau has some of the biggest and most popular casinos in the world and is constantly frequented by Chinese gamblers.
Initial reports suggest that should this new gaming law be approved, it will not be applicable to Macau’s casinos. This will be a relief to Macau casino operators as they derive over 50 percent of business from Chinese VIP gamblers.
China had earlier launched a massive crackdown on Macau’s casinos in 2016 to stop VIP gamblers who were engaging in money laundering activities. Since then, Macau’s casinos have been more vigilant to vet their VIP clientele although it is no clear if these protocols are being diligently followed.
We will have to wait and see what the new law entails and whether it will get the required approval.
