Focus on Asia: Junket Bans Spell Dark Days for Asia’s VIP Segment By Ben Blaschke, Managing Editor, Inside Asian Gaming June 1, 2021 at 10:00 am Asia’s VIP operators, also known as junkets, have faced plenty of headwinds in recent years. But if recent evidence is anything to go by, the challenges ahead are growing more significant with each passing day. One particularly notable development that has flown somewhat under the radar in recent months has been the banning of all junkets in at least five jurisdictions across four different countries throughout Asia-Pacific. In Australia, the sins of its biggest casino operator, Crown Resorts – largely exposed during a New South Wales inquiry into its suitability to hold a casino license for its AU$2.2 billion high-roller Crown Sydney development – has caught the eye of regulators nationwide, with two states having responded by issuing a ban on junkets. After Western Australia led the way in February, the NSW Independent Liquor and Gaming Commission revealed in May that both Crown and Star Entertainment Group had agreed to end all junket operations at their Sydney casinos. Victoria has so far refrained from such a ban, although it has issued an edict that any junket operators working out of Crown Melbourne in future must first be approved by the regulator. New Zealand’s SkyCity Entertainment Group, apparently sensing the prevailing winds, has made its own call to ditch junkets and will bring all VIP operations in-house instead. Japan, although still only midway through the long process of granting its first ever casino licenses, released its draft casino regulations in early April, which, albeit not specific, suggested that junkets will not be permitted in its IRs. The regulations also focused heavily on ensuring the absence of any organized crime links – adding to speculation that Japan will become the most highly regulated gaming jurisdiction in the world. Also in April, Saipan’s Commonwealth Casino Commission issued an order prohibiting the issuance or renewal of any licenses related to junket activity, effectively ending Imperial Pacific International’s high-roller focus should it ever reopen Imperial Palace · Saipan. The Saipan decision likely reflects recent threats from mainland China aimed at jurisdictions said to be attracting Chinese tourists for the purposes of gambling. Those threats, which include a blacklist of destinations upon which China plans to impose travel restrictions post-COVID, may well spark action further abroad in time, even though some countries such as the Philippines have thus far stood firm. Certainly it is worrying times for the junket industry as a whole, which is already reeling from the COVID-19 pandemic, as well as a gradual movement in its biggest market of Macau away from junket-based business and towards premium mass. Is it any wonder that Asia’s biggest junket, Suncity Group, has been future-proofing itself by moving directly into IR operations? As IAG wrote last year, Macau’s VIP segment has seen its GGR contribution tumble in recent years from a high of US$29.33 billion in 2013 to US$14.0 billion in 2019. It’s hard to see where a much-needed growth spurt is going to come from any time soon.