According to this article by Reuters, the two new casinos in the Philippines are hoping to lure junket operators from Macau to bring gamblers from China to gamble in the Philippines by offering lower gambing taxes and lucrative payment terms.
There are approximately 200 junkets operating in Macau. They typically bring wealthy gamblers from China, and rent VIP Rooms in Macau casinos for their clients to gamble. Junkets operators issue credit to their high-roller clients, and earn commissions from the funds gambled by their clients at casinos. They generate about 75% of the funds gambled in Macau. Through sub-agents, they also collect gambling debts in China afterwards.
The Financial Action Task Force has identified money laundering risks with junkets. According to the FATF, the risks arise because there are gaps in controls and weak supervision of VIP Room operations. Junket operators control the movement of money to and from the casinos which can obscure the anti-money laundering processes. Moreover, they bring in high rollers to gamble who are subject to relaxed money laundering vetting, not more, as is required.
The conern is greater, however, than that identified by the FATF. As a result of the junket arrangements in Macau, upwards of 75% of the funds gambing is not subject to anti-money laundering oversight. That is because the junket operators are not subject to AML reporting to a FIU in Macau and their high rolling clients gamble exclusively in the VIP Rooms that are managed and operated by the junket operators.
Despite these risks, the Philippines is hoping to enter into arrangements with junkets to help grow the national gambling market and join Macau and Singapore as one of Asia's top gambling destinations. Analysts predict that the gambling market in the Philippines will reach $3 billion by 2015.
The two new casinos are Solaire Resort and Casino on Manila Bay, owned by Bloomberry Resorts Corp., which is controlled by billionaire Enrique Razon Jr.,and is a $1.2 billion project slated to open in March 2013; and Belle Grande Casino in Entertainment City Maninla, owned by Belle Corp., which is controlled by billionaire Henry Sy, and Melco Crown Entertainment Ltd., owned by Australian billionaire James Packer and Hong Kong businessman Lawrence Ho, and is slated to open in March 2014. Melco Crown is listed on the Hong Kong Stock Exchange.