The Government is of the opinion that the maximum rolling chip commission for junket operators should be set at 1.25%, saying that such level is ‘reasonable’.
The remarks were made by the Secretary for the Economy and Finance Tam Pak Yuen (譚伯源) in a meeting with six casino operators yesterday afternoon (21 May).
Present at the meeting were Stanley Ho of the SJM, Stephen Weaver of LV Sands, Francis Lui Yiu Tung (呂耀東) of Galaxy Casinos, Linda Chen of Wynn Macau, Lawrence Ho of PBL Melco and Pansy Ho of MGM Grand Macau.
Tam told reporters after the meeting that ‘one or two’ casino operators proposed to the Government to set the rolling chip commission rate for junket operators at 1.25% to the maximum, although some companies feel that the rate is still high.
He pointed out that the Government thinks ‘preliminarily’ that the rate is at ‘a reasonable level that all companies have relative consensus’. He promised further studies and will publish a detailed proposal in one or two months for consultation within the sector.
Tam also indicated that the Government will formulate guidelines based on the consensus reached within the sector. The guidelines will be complied with by the operators, with monitoring and coordination by the Government without intervention.
He warned that administrative and legislative means will be introduced if such guidelines are found not complied with, and these means may include penalties.
Meanwhile, a consultation group for the gaming sector will be set up by the Government within a month after the necessary administrative procedures are cleared.
Tam also revealed that certain operators suggested to the Government to limit the number of gaming tables, although opinions were divided.
He emphasised that the Chief Executive Ho Hau Wah (何厚鏵) had made clear that the development scale of Macau’s gaming sector will be strictly controlled, which should have responded indirectly that the number of gaming tables will also be within the scope of control.
Tam said that it is time for the Government to play a more dominating role in Macau’s gaming sector development, saying that the first four years were given to casino operators to explore the market and coordinate themselves.
The Government’s role is to coordinate the gaming sector development and the overall interest of the society, so that the economy can achieve a suitable degree of diversification.
The Macao Daily News described the atmosphere of meeting was ‘hostile’, with SJM’s CEO Stanley Ho criticising competitors for ‘neck-cutting’ competition, while other operators apart from LV Sands declined to comment further on the details of the meeting.
Stanley Ho told reporters that the 1.25% commission rate proposal was ‘put up by him’, and other companies collaborated ‘apart from LV Sands’.
He also accused LV Sands for introducing a rate at nearly 1.5% is ‘neck-cutting’.
Ho also proposed that Macau should limit itself to have 6,000 gaming tables, with each casino operator having 1,000.
Stephen Weaver pointed out that he understood the intention of the Government, but there are ‘practical difficulties’ in introducing guidelines., and said that it is difficult for him to comment whether this will be effective.
He also said that there is no need to restrict the number of gaming tables, pointing out that casinos with a lot of gaming tables do not equal to being able to attract customers, and that other leisure facilities are needed in this regard.
Sources admitted that certain casino operators experience difficulties in the recent ‘commission war’, saying that if the rolling chip commission rate is pushed up further, casinos may be losing money to do business.
Some VIP rooms have even set commission rate of 1.4% to attract junket operators to bring customers in, and rumours about foreign-based casino operators may introduce commission rates between 1.4 to 1.5% have been spreading around, according to Macao Daily News.
Some worried that with gaming revenue rate set at 5% in Singapore, the island city state may overtake Macau should the casino resorts open in a couple of years’ time, and whether the 1.25% commission rate limit will help a healthy development of Macau’s gaming sector is yet to be established.
Source: BlogMacau.info