Sky 33
They flock to private clubs like Sky 33 in Galaxy Entertainment’s casino, where anybody who doesn’t wager at least 5 million yuan isn’t welcome, or Sky 32, which has a waterfall and a 10 million yuan minimum. The junkets that bring most of them in scout for patrons across China, and then arrange transportation, hotels and a line of credit.
The system made sense when Macau opened up its gaming market in 2002, granting permits to five new operators -- Sands China, MGM China, Galaxy Entertainment, Wynn Macau and Melco Crown -- and breaking a 40-year monopoly held by Stanley Ho’s SJM Holdings Ltd.
SJM, Asia’s largest casino company by revenue, relies entirely on junkets to bring in its VIPs and has no plan to change its full reliance.
“SJM is comfortable with our junket relationships and with the junket system, which operates legally in Macau,” CEO Ambrose So said in an e-mail.
In-Depth Databases
The newcomers, barred from marketing in China and with no legal route to collect debts, had to rely on promoters with agents who could lure VIPS and make sure they paid their debts.
Now, after a decade of operations, the casino companies are familiar with many of China’s well-heeled residents, including those who’ve spent time on their gambling floors.
“Casinos have a much more in-depth database to tap,” said Richard Huang, a Hong Kong-based analyst at CLSA Ltd. They have more opportunities to collect debts too. “With most of the rich Chinese having offshore bank accounts or properties, that gives casinos increased comfort in extending them credit.”
High Risk