Tighter junket regulation imperative, says academic

By
Joanne Kuai

Macau gaming industry has gone through 10 monthly consecutive revenue drops. While some analysts attribute it to the anti-graft campaign raging in Mainland China or increasing competition from within the region, such as from South Korea or the Philippines, or even the smoking ban, Professor Zeng Zhonglu from the Gaming Education and Research Centre of the Polytechnic Institute of Macau believes the non-sustainability of Macau’s junket operation mode is the biggest reason contributing to the revenue slump.
Professor Zeng said the operation of VIP rooms in Macau’s gaming industry is out of control, citing the lack of security for investors, the absence of credit monitoring and the increasing number of problematic gamblers. He said such issues have had a very negative influence on Macau society.
The gaming industry watcher compares the junkets in Macau to Lehman Brothers during the economic crisis that unfolded in the U.S. in 2008, saying the loose control of credit would finally result in bad debts and hurt Macau. Hence, he calls for tighter regulation of the local junkets.
In terms of the mid-term review of the gaming concessions, the scholar believes that the number of licences will be maintained as more licences means more gaming operators, which may result in the gaming industry demanding more land and resources and ultimately hurting all the other industries in Macau, causing unbalanced development.
He also believes some other requirements should play a more important role, including the gaming operators’ efforts to develop non-gaming sectors, as well as fulfilling other social responsibilities. However, he believes the existing problems that the Chief Executive addressed before such as gaming operators providing accommodation and transportation for their workers would be resolved once construction is finished. Professor Zeng found the existing taxation quite reasonable and said it should be maintained.
Professor Zeng was attending a forum on the gaming industry of Macau yesterday night hosted by the Cunha Foundation.