Singapore To License Junkets For Higher Gaming Revenues
Despite the growing concern of analysts on the government’s decision of bringing in junket operators to its Integrated Resorts (IRs), Singapore is pursuing its plan of licensing junket operators that are believed to increase Singapore’s gaming revenue.
Junket operators have earned a notorious reputation for being associated with crime lords especially in Macau, where they share a large chunk of the casino market and get almost half of the profits. Their role involved inviting high rollers to casinos and acting as money lenders or collectors for these customers. The tolerance of Macau to junket operators has unfortunately led to the presence of fly-by-night junkets and scammers who would bring in shady gamblers or take away ridiculously large commissions from their clients.
In Singapore, the scenario won’t be the same. Junkets will share an estimate of 20% of the market, not as big as analysts have predicted earlier, and will be strictly regulated by the government’s Singapore Casino Regulatory Authority. However, because of the high criteria the government has set for junkets, no applications have been approved as of press time.
“Singapore said if you do junkets our way, you can have junkets,” said former Marina Bay Sands chief executive officer and current Harbinger Advisors president Thomas Arasi in an interview with Asia Times. “The Singapore government isn’t saying what junkets can do; it’s about who the Singapore government is willing to license.”
While it appears that Singapore’s casino operation model may seem very limiting, it’s not seen by experts to affect the financial performance of the said industry. The model, in fact, is very conducive for businesses, at least for those who can afford to enter the billion-dollar industry.
Besides, the country permits 100% foreign ownership of businesses and provides long-term land leases. The country also has a lucrative tax scheme, with a headlining corporate tax rate of 17% as compared to Macau’s 39% and Japan’s 38%. Singapore has indeed the
Arasi believes that the presence of junkets will definitely increase the market demand in the gaming sector. This could pave the way for the opening of a third casino in the island state.