Inside Asian Gaming

INSIDE ASIAN GAMING | February 2009 46 for a casino to properly evaluate the amount of business that they receive from an independent junket rep versus the cost of maintaining a salaried employee or a branch office where one hundred percent of their time and effort goes into marketing your casino on an exclusive basis. A few Junket Reps do operate exclusively for some of the larger casinos but this is fairly rare today. Obviously this is not a simple decision and careful analysis is required to estimate the size of the market as well as the market potential. In some remote locations, time, distance, high air fare costs, etc. will limit the number of players that can travel on a regular basis to your casino. In those situations, a reputable junket rep is probably a more cost effective solution to your marketing efforts versus a salaried employee. Finding a reputable junket rep that has good relations with his customers is critical. It is a lucrative business and therefore there are a lot of “wanna be” junket reps out there without any real experience and without a loyal established customer base. The other big problem that usually crops its ugly head with inexperienced, unprofessional junket reps is regulatory violations. One example is that junket reps do not get paid until the casino gets paid. Consequently there have been numerous horror stories of unprofessional junket reps using unauthorized methods to try to help the collection process. This has caused many embarrassing situations for highly regulated casinos resulting in high fines for the casinos and terminations for the marketing executives. Similar stories abound about junket reps collecting large sums supposedly on behalf of the casino and then disappearing leaving the customer very upset and angry. Another common problem is “Loan Sharking”. Many of the not so reputable Junket Reps enter the business primarily to extend their loan sharking business where they lend gamblers money at onerous interest rates of up to 10%per week and then use illegal methods to threaten customers in an attempt to collect their money. In addition, the casino usually also loses the customer as they are still required to try to collect on the legal credit obligation. My recommendation is to not allow a junket rep to be involved with either the credit process or the collection process. This is different in Asia where junket reps are allowed to extend credit to their players and collect it, primarily because gambling debts are not enforceable in many countries in Asia and therefore the casinos cannot risk extending credit that they may not be able to collect. Another problem area that I often see is related to lack of training. Junket reps do not understand all of the various regulations and laws. They often represent many casinos in multiple gaming jurisdictions so the regulations can vary dramatically from country to country and even from state to state. Do not leave anything to chance. Getting started Before you begin a junket program or dealing with a new Junket Rep, a casino needs to do the following: √ Insure that the program is completely legal and meets all reporting and regulatory requirements. You may want to meet with regulators to establish good communication channels. √ Develop a formal training program that is well documented and you may even want to “certify” each junket rep with a brief test to insure that they really do understand both the regulations and the need for compliance. √ Set monthly financial goals or targets for the numbers of players expected each month as well as revenue expected either in actual results or in theoretical win. √ Finalize a fair commission program. I like programs that are tiered that offer the junket reps more commission based about reaching different pre-set monthly goals or targets. Also, establishminimum play criteria and define what an actual trip consists of for the number of days involved or number of shoes or hands of Baccarat that must be played. √ Plan to support the junket reps that do achieve certain goals either with office subsidies, pre-printed shells that they can use to print their invitations on or running player parties in their local market. √ Consider a formal junket agreement that would limit the junket reps activities that may be deemed competitive, i.e., not being allowed to represent other local casinos that you compete against. The formal agreement should also define all terms and conditions. √ Insure that your internal organization is prepared to issue reports quickly upon the completion of each junket and to process payments to your junket reps quickly and on time. √ Support your better junket reps and look for opportunities to recognize their loyalty and efforts by running parties or mini-special events for them and their players at the casino. These events are almost always extremely profitable and cost effective. √ Communicate and train your in-house staff that your junket reps are basically your external sales people who work on a commission basis versus a salary basis but most importantly that they are part of your team and should be treated with respect and as they would like to be treated. This will help eliminate some of the competition between in-house Casino Host or Player Development Executives and the Junket Reps. √ Develop a coding system so that you can track productivity of both Junket Reps and in-house staff. √ Never allow an in-house staff to steal a Junket Reps customer. These are some of the general rules and Junket Reps take good care of their clients to keep the casinos’ coffers wealthy Junket Reps