China cracks down on junkets

China began cracking down on VIP high roller junket tours to Macau by seizing accounts and other funding for high rollers. The move could not have come at a worse time for the global gaming mecca of Macau, which has been struggling with massive revenue losses due to coronavirus lockdown.

The Purge

China views cross-border financial transactions as a national security risk, especially when VIP gambling junket tours operate on the gray market. Junket tour operators lure high rollers from China—where gambling is illegal—to VIP gaming experiences in Macau.

Junket tour operators do not provide gambling services, but rather credit lines and money exchange services for wealthy Chinese gamblers. But the dark side of the junket tours involves money laundering, tax evasion, and offshore investments ‘off the radar.’ And therein lies the problem for China.

Junkets operate underground bank transactions to finance their tours, which include private jets, luxury accommodation, currency exchange, debt management, and credit lines. Chinese authorities have frozen thousands of bank accounts and seized more than $33 billion in funds. They have also shut down illegal gambling operations on a weekly basis.

On Borrowed Time

Anthony Lawrance, managing director of the consultancy firm Greater Bay Insight, said “The junket sector in Macau has been living on borrowed time for years, and the end is drawing nearer. China clearly intends to cut out these middlemen and gain better control over the outflows of yuan through Macau.”

Chinese authorities say they are not trying to attack Macau’s gambling sector, as they are a special administrative region (SAR) of China with a large degree of autonomy, which includes legal gambling. However, the VIP junket sector makes up 50% of overall revenues, which topped $36 billion last year.

One of the largest junket operators, Suncity, has been the target of ongoing investigations for years. China suspects the junket operator of facilitating illegal money laundering, tax evasion, and having ties to organized crime.

As a result of China’s crackdown, 900 players withdrew deposits from Suncity’s VIP clubs in Macau between July 9-11. Other investors also pulled cash out of Macau out of fear of government seizure by China.

In order for Macau’s gaming sector to survive the coronavirus and the VIP tour shutdown, the casinos would have to step up and fill in the gap. This means they would have to extend lines of credit to high rollers and manage their debts as well.


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Richard Holmes was born in Tampa, Florida and studied computer science at Pensacola Christian College in Pensacola Florida. A devout Baptist, volunteer Sunday School teacher and online gaming fan, Richard works as a part-time systems administrator at Baptist Hospital and part-time professional blogger specializing in statistics, probability and computer science issues. He is an ardent believer in the future of artificial intelligence as a tool for transforming human society for the better, particularly in the area of health care and modern medicine. A chess player, and competitive online gamer Richard actively participates on online gaming tournaments in his free time.