Singapore’s Casinos Accumulate Large Outstanding Payments
Singapore is one of the safest countries in the world with an extremely effective judicial and law enforcement system resulting in a low rate of crime. The country has two casinos Resorts World Sentosa which Genting Singapore Plc developed and Las Vegas Sands Corp’s Marina Bay Sands.
These two casinos bring in a lot of revenue and nearly 50% of that revenue is derived from VIP Chinese gamblers who visit Singapore specifically to gamble. Most of these gamblers used to visit Macau, the only place in Mainland China where gambling is legal.
Ever since Beijing tightened regulations and cracked down on money laundering in Macau, these VIP gamblers have preferred to travel across the border to countries like Singapore, Malaysia and Vietnam to gamble.
Unlike Macau, Singapore does not rely on junket operators to help facilitate a smooth gambling experience. Junket operators are agencies who lend huge sums of money to VIP gamblers so that they can gamble at casinos. They are also responsible for collecting outstanding debts from these VIP gamblers and paying back the casino, earning a commission for their services.
While these junket operators have flourished in Macau, they have also been rumored to have links to organized crime and assist in money laundering operations. Singapore has refrained from licensing and allowing a flock of junket operators and has preferred to give its casinos the responsibilities of lending cash and collecting outstanding receivables. The government of Singapore did not want the country’s image to get tarnished by these junket operators nor did it want to encourage a system that could easily foster corruption and organized crime.
The lack of junket operators in Singapore has resulted in outstanding amounts piling up for both casinos. The Resorts World Sentosa has more than US$787.5 million currently outstanding which is nearly twice the amount that was outstanding in 2010. The Marina Bay Sands also has millions of dollars outstanding and both casinos have to rely on the legal system to recover their dues.
In a statement, Grant Govertsen, an analyst at Union Gaming Advisors said
Singapore casinos are dealing directly with the VIP players. That makes it a lot tougher to collect receivables because they don’t have the typical resources that junket operators would have to collect such gambling debts.
In 2014, there were 49 lawsuits filed against gamblers in Singapore’s High Court and an additional 15 filed during the first quarter of 2015.
