Inside Asian Gaming

October 2012 | INSIDE ASIAN GAMING 27 profitability of the whole system hinges on the ability of the agents to collect debts. As gambling debts are not recognized as a legally binding contract in China, such debts cannot be enforced via the courts there. It’s up to the agents to ensure players honor their credit. “The casinos in Macau essentially extend the credit to the junket operators. The casinos don’t want to touch the credit or the debt collection issue directly,” says the source. “It would be difficult for them to go through their local gambling compliance procedures in the US or to follow the relevant anti money-laundering policies, so they want to outsource it to the junket operators. “The junket operators really know their customers and have this very good network of local people in China. If you as a player lose money, you’ll be given a certain amount of time to pay up, and if you don’t, the local representatives are going to follow you wherever you go until you do. That’s much more effective than the casino operator trying to chase the debt itself, long distance,” says the insider. “I’m not going to go into details of how exactly they collect, but they’re definitely more effective.” In Focus extension of the casinos themselves—i.e. all the staff and action within are directly controlled by the casino. In Macau, VIP rooms deal almost exclusively with junket customers—players who wager sums of money in return for a percentage commission on their turnover. Western-style VIP rooms, on the other hand, are for customers whose play is large enough to qualify them for a higher level of service and comps. The first and main differentiating feature of a Macau VIP room is the presence of a VIP cage. The main currency in the VIP cage is the junket chips. Depending on how many arrangements the VIP room operator may have, the VIP cage may deal with one of more sets of junket chips. The reason for this is to keep track of the players belonging to either different junket agents or playing under different commission schemes. A single VIP cage may sometimes have to deal with dozens of chip sets. The other main difference between Macau VIP rooms and their Western equivalents is the prevalence of credit. In Australia, where some states ban casinos from offering credit, the casinos use a mechanism called the check cashing facility (CCF). VIP patrons are ‘permitted’ to cash their personal checks, and the casinowill agree to hold those checks for a certain number of days before presenting them to the bank (usually around five working days). The patron can ‘buy’ or redeem their check back at any time prior to that deadline. Some casinos may even require the client tohave played and lost somemoney before this facility is granted. The credit arrangements within the Macau VIP rooms are more straightforward, where players are simply given a ‘marker,’ which commonly range from hundreds of thousands of Hong Kong dollars to the tens of millions, and at the very highest level, the hundreds of millions (tens of millions of US dollars). Although commonly known as a credit marker, in some instances, the marker may not actually involve credit at all. It just means that the VIP room is issuing chips without any cash changing hands inside the room. In reality, the cash may have already been transferred to the VIP room operator’s offshore account, and all the VIP cage knows is that the VIP room operator has directed it to issue a certain value of chips to this particular patron. Inmost cases, however, credit is involved, and the risk shared by both the VIP room operator and any junket agent involved. A common arrangement sees the junket agent put up a deposit, of say HK$2 million (US$250,000), while the VIP room operator in turn grants a maximum credit facility of HK$4 million to the agent’s players. The Macau PR host’s main function is to “roll”the chips on behalf of the players. What this means is that they will take the cash chips won by the players to the VIP cage, and exchange them for junket chips, in order to earn the rolling commission. Beyond that, the typical PR host in Macau is a “Jill-of-all- trades,” having to perform the duties of a companion, host, waitress and assistant. Macau PR hosts take orders and serve F&B. They may also be required to physically record each bet as it is placed, as well as keep a real-time up-to-date record of the players’ (and house’s) win/loss performance. Macau PR hosts will even do the scorekeeping for the baccarat outcomes, but most importantly, they are sometimes trained and permitted to advise the customers on which bet to place next. To the Western-trained mind, gambling is all about statistics and odds, and baccarat is one of those games where the experienced floor manager will tell their underlings that there is no system that will affect the house advantage. To the Chinese mind, baccarat is about patterns. Therefore, the PR hosts will help record the scores (even though the tablemay already have an electronic display screen), and should the customer venture a query as to what the next outcome would most probably be, the hosts will be ready with an answer, depending on the pattern they have charted. In the event the customer wins, the host will more than likely get a nice little tip, and should he lose, there are generally no repercussions for the host as it was the customer who asked in the first place. Whereas the Western-style VIP room is usually a large, single room within a casino housing many tables, Macau casinos typically contain several separate smaller VIP rooms. The Western VIP room caters to a much broader range of customers, some of whom would be labeled as mass hall players in Macau if one was to only consider their average bet per hand. The Western VIP room is also more like a club lounge than a serious gambling room, and customer loyalty is mostly rewarded with comps in the form of show and event tickets, rooms, meals, etc., rather than the all-important commission program used to incentivize VIP players in Macau. While Macau PR hosts provide very individual and attentive service, appealing to the basic needs of ego and recognition, their Western counterparts are arguably more empowered and productive. The hosts in Western VIP rooms usually have to look after all the guests within the room whilst performing a wide range of functions, from manning the reception desk to making limousine bookings for customers. They rarely have the time or inclination to sit down and watch individual customers play each hand.