Although Macau remains famous as the Vegas of the East, the region’s casino industry is now a far cry from its heyday of 2014 when 235 junket operators contributed around 60% of the $45 billion casino revenues, more than triple compared to Las Vegas. This drastic reduction is part of several targeted measures by local authorities to reign in the industry and diversify the region’s tourism sector.

Junkets Face Even Stricter Regulations

Macau’s gaming regulator set a cap of 50 junkets for 2024 last September. Only nine collaborators have registered so far, even though authorities allow up to 250 collaborators in the entire market. Gaming collaborators are individuals with extensive networks who use their influence to bring players to VIP rooms. They are subject to regulation and must adhere to strict guidelines.

Junket operators, each permitted to partner with a single gaming concessionaire, earn a commission, capped at 1.25% of rolling chip turnover, for their promotional services without sharing casino revenue. Licensing requires a guarantee of MOP 1.5 million ($186,500) and a minimum corporate capital of MOP 10 million ($1.24 million).

Macau’s VIP segment faces further restrictions as the government proposed barring junkets from lending money for gaming and enhancing controls over their activities. A new draft bill intends to limit credit provision to licensed companies, disallowing gaming intermediaries from this practice. The proposed legislation will significantly impact the junket sector, limiting its competitiveness.

The Industry Is Pivoting to High-Profile Resort Operators

Despite the significant reduction in junkets, Macau’s gambling industry has experienced an impressive resurgence as gaming revenue soared to MOP 183.05 billion ($22.76 billion) in 2023, marking a staggering 333.8 % increase compared to the previous year. These figures highlight the shift to high-profile casino resorts and the increasing reliance on customers from mainland China.

The 18-year prison sentence against Alvin Chau, the former CEO and founder of the junket operator Suncity Group, is another contributing factor to the declining popularity of such businesses, as they have faced significant scrutiny due to their associations with organized crime and money laundering. These shifting market paradigms allow local authorities better control over the gambling sector, contributing to a safer customer experience.

Evolving market dynamics and regulatory pressures mean that Macau’s Junket industry will likely continue its decline. While a few licensed operators will likely remain active, updated regulations and post-COVID realities mean the industry will never return to its previous state as the region steadily pivots to a new, more refined, and lustrous image.

The post Macau Witnesses Another Drastic Decline in Junkets appeared first on Keno Wizard.

Bulgaria has finalized an overhaul of fees for gambling operators, increasing costs between two and four times. These measures should bring in roughly BGN 200 million ($112.62 million) in additional revenue for the government. This amendment, integrated into the final provisions of the 2024 State Budget Law, garnered support after significant deliberations involving the country’s controversial Revival Party.

Industry Representatives Expressed Concerns

The revised fees, adopted during a special budget committee meeting on Sunday, have drawn mixed responses. Proponents, such as MP Petar Petrov, advocate for fee hikes, highlighting the need to create a level playing field for operators. He underlined concerns about the previous licensing structure creating unequal conditions and emphasized the need for consistency in regulatory frameworks.

Opponents of the substantial fee increases worry about the potential adverse impact of inflated costs on administrative burdens like licensing procedures. Though they acknowledge the need for updated fees, their stance advocates a more strategic and considerate approach. According to the AGIB, the new taxes are disproportionate and could make some operators’ businesses unsustainable.

Finance Minister Assen Vassilev addressed these concerns, defending the parliament’s decision. He noted that gambling operators were equal before the law, and the timing of their market entry should not impact licensing fees. He compared the gambling sector to the tobacco industry, noting that the state had the right to adjust tariffs to reflect economic realities.

Most Verticals Will See Substantial Increases

The newly adopted texts envision a multifaceted fee structure. For instance, five-year licenses for gambling activities, excluding online betting, will now have a fixed levy of BGN 300,000 ($169,000) and an additional 20% variable levy based on payout percentages. The revised regulations also set different fees for gaming machine licenses based on local population density.

Games that rely on participation fees and commissions will instead pay a 20% tax on their income. Additionally, legislators sanctioned a last-minute amendment introducing sanctions ranging from BGN 5,000 ($2,800) to BGN 10,000 ($5,600) for undeclared gaming activity. These changes become effective on 1 January 2024, giving operators little time to prepare and eliminating the possibility of any significant revisions.

The implemented fee hikes underscore Bulgaria’s strategic revaluation of its gambling industry, aiming for a more equitable landscape while concurrently boosting state revenues. However, the divisive opinions and concerns highlight ongoing debates regarding the impact of such regulatory measures on operators and the industry’s overall sustainability.

The post Bulgaria Introduces Drastic Fee Hikes for Gambling Operators appeared first on Keno Wizard.

Representatives from leading trade associations in Italy’s gambling industry united in a resounding voice at the “Game: One Market, One Reorganization” conference by the Milton Friedman Institute. The participants highlighted concerns over the government’s proposed exorbitant increase in license fees, urging for correct and uniform regulatory and economic policies.

Attendants Highlighted Worrying Industry Trends

The event drew united representatives from leading associations, with Alessandro Bertoldi, Executive Director of the Milton Friedman Institute, presiding over the conference. Bertoldi emphasized the unjustified drastic spike to €7 million ($7.66 million) from 2018’s €200,000 ($392,000) could have a lopsided impact on market dynamics, legality, and consumer protection.

The regulatory interventions that the Government is preparing will once again create disparities by favoring the illegal market and heavily conditioning the free market.

Alessandro Bertoldi, Milton Friedman Institute Executive Director

Emmanuele Cangianelli, President of the Italian Association of Public Games Operators, advocated for an integrated overhaul of gaming distribution channels and products. He urged clear regulations on payment services to bolster online gaming, emphasizing the importance of preserving the uniqueness of concession titles while offering multi-channel consumer choices in legal gaming.

Geronimo Cardia, President of ACADI, Italy’s Association for Slot Machine Vendors, lamented the sector’s decade-long struggle due to fragmented and partial interventions, emphasizing the negative impacts on public interests, legal compliance, and employment levels. He stressed the detrimental effects of prioritizing remote gaming reorganization over retail, reducing revenues, compromising player protections, and stifling SMEs.

Smaller Businesses Will Suffer the Most

These were far from the only concerns, as other representatives underscored the significance of recognizing small and medium-sized gaming enterprises, highlighting the sector’s economic contribution and employment opportunities. They urged inclusive policies benefiting diverse operators, noting that the drastic fee increase would reduce active operators to 20, down from the present 91.

Stakeholders also used this opportunity to reiterate their opinions on Italy’s blanket ban on gambling advertising, arguing that it hurt the competitiveness of licensed operators and was partly responsible for the proliferation of black market players. The industry united in support of small and medium-sized businesses, most susceptible to regulatory uncertainties.

The legal gaming sector expresses its disappointment at the missed opportunity for an organic overall and coordinated reorganization.

Moreno Marasco, Logico President

The united front of industry representatives conveyed a clear message urging the government to adopt comprehensive, fair, and cohesive policies that uphold legality, support diverse operators, and prioritize consumer welfare in its approach to the sector’s reorganization. However, the Italian government has not proven receptive to industry input and may push on with its reforms regardless of stakeholder warnings.

The post Italy’s Gambling Industry Unites against Drastic License Fee Hike appeared first on Keno Wizard.