The Junket Business is Broken and Dragon is the Solution

The gambling business is growing year on year and countries all over the Asia are jumping onto the band wagon to take advantage of the growing number of gamblers especially in Asia. 

The leader of the gambling business is still Macau with her glitzy hotels and casinos and ability to attract high rollers from all over the world. These high rollers come to Macau to gamble in the private VIP rooms known as Junkets. 

Business has returned back to the hey days after the Chinese government crackdown on corruption but there are 2 emerging trends that could put a screeching halt to the industry. First, the tightening of regulations by the Chinese government and second, the abandonment of junket systems by newer casinos in Asia.

Tighter Regulations By Chinese Government

The junket business is a high growth, high margin business and in Macau alone, there are 197 licensed junket operators, of which a number are listed on the Hong Kong Stock Exchange. 

The junket business is a legitimate business but there have been dozens of junket operators who have engaged in extra-legal practices, links to triads and resorted to violence to collect debts. 

This is frown upon by the Chinese government and while junket operators are still legal in Macau, junket operators who are deemed to have criminal links as well as not been cooperative to the Chinese government, have been removed. 

The Chinese government is concerned with capital outflow and wants to be able to track funds that are leaving China. This is where Dragon Inc can provide the transparency for the entire industry. Funds moving out of China can be tracked via the blockchain and criminal activities such as money laundering can be traced. What Dragon Inc provides is a capability for the Chinese government to monitor and regulate the industry. 

When the Chinese government tightens the regulations on the junket industry, we will see that usage of Dragon coins will be the only option for junket operators if they want to stay in business in Macau.

Abandonment of Junket Systems by Newer Casinos in Asia.

The second trend is more worrying for the junket operators. Countries, who are opening up casinos for the first time, are abandoning the junket system for the “player agent system”, as they want to stay away from some of the less desirable aspect of the junket system.

Singapore does not allow the junket system and uses the “player agent system” in which the licensed agents can attract VIP players to the casinos but these agents cannot grant credit to the players; effectively eliminating the credit/loan system and requiring the players to stake with their own funds.

Japan lawmakers have been advised to ban the junket system and they have pointed out that the country’s casino regulatory framework would be broadly based on those of Nevada and Singapore, which could mean that a form of the latter’s player agent system could be introduced in Japan.

With the new system, the junket operators will have to adapt and facilitate the transfer of funds from the VIP gamblers. The cross-order nature of crypto becomes ever more important as fiat transfer would be too costly and dealing with agents may not be desirable. Dragon coin would be the solution as transferring crypto currency is lower in costs and also Dragon coin will allow direct exchange into gambling chips at the dragon owned or affiliated casinos.

As more junket operators opens up more junkets outside of Macau, they will have to play by the new rules and become more transparent. Dragon Coins will provide the means for the junket operators to be able to meet these new trends and for the industry to be saved.