Outside of Asia, the term 'junket' is perhaps somewhat of a mysterious concept, so let us explain what a junket is and shed a little light on how they work.
Firstly, a junket is essential the equivalent of a high stakes or VIP room in the west; the only difference is that in Asia when they say it is a room for High Rollers – they mean really high! According to Forbes, some casinos in Singapore take bets up to a breath-taking $550,000 on a single hand versus a 'paltry' $150,000 accepted on the Las Vegas Strip.
Sometime ago Las Vegas Sands CEO Sheldon Adelson pledged to invest the then seemingly outrageously large sum of $10 billion into Macau casinos and hotels, famously saying that it would become "the Las Vegas of Asia." A Macau industry executive corrected him and said: "Las Vegas will become the little Macau of America."
While the media keeps shining their spotlight on the Las Vegas market, in fact, the Asian casino market is head and shoulders above anything happening in the USA. In 2018, the not inconsiderable amount of $11.9 billion was generated by the casinos in Las Vegas however if you take a moment to contrast this against the $37.6 billion generated in Macau you can clearly see that this is where real VIP / High Rollers are.
Macau casino revenue in June surprised analysts by growing 5.9% year-on-year to reach $3 billion, according to data released recently by the Gaming Inspection and Coordination Bureau who were expecting a figure close to 2%.
Macau is perhaps the obvious location when mentioning gaming in Asia, but new hot spots and markets continue to emerge in countries such as Vietnam, Cambodia, Philippines, Myanmar, Singapore, South Korea and many others.
When you think of gaming, it's only natural for your thoughts to go the casino floor as that is of course where thousands of people go to enjoy the challenge of outwitting their opponents in their favourite games such as baccarat, blackjack or at the roulette table.
In addition to the publicly accessible gaming areas, private gaming rooms and venues operate for VIP / High Rollers known as junkets.
Each junket is unique in the way they are run, and requirements vary depending on the countries where they are located; the agreed gaming rules and a minimum amount of time to be played, along with the minimum amount of money that has to be spent.
VIP / High Rollers wanting to play in a junket need to deposit the minimum buy-in amount, specified by the junkets agent before arriving at the event which typically starts at more than $25,000 and range upwards of $600,000.
If a junket organiser partners with a casino they have to pay to use their VIP gaming rooms, and in return, the casino will pay the junket organiser a commission based on the amount of money gambled by the VIP / High Rollers. Often a middleman junket agent also receives a cut on players chip buys as their fee.
Often VIP / High Rollers are enticed to a certain junket through an all-expenses-paid trip with free first-class travel, fine dining and stays in luxury hotels. If they win a significant amount out of the junket, they get to keep their winnings as well as enjoy the free trip – so it’s easy to see why this model is so popular with many VIP / High Rollers in Asia.
The gaming industry as a whole continues to grow dramatically, boasting an enormous global revenue with expected reports of a $15 billion increase in the global market as it reached a dizzying $449.3 billion as 2018 drew to a close and is expected to reach a colossal $565 billion by 2022.
The Asian revenue in this sector topped $71.4 billion in 2018, with the gambling mecca of Macau generating a massive $37.6 billion, a 14% yearly increase, of the total amount and of this,VIP Baccarat generated approximately $20.5 billion of this sum.
VIP Gaming contributes to 54.8% of all Macau casino revenues however Suncity Group has laid down a clear statement of intent as it invests $4 billion into their Vietnam project and reportedly has their sights set on one eye on the Philippines, Cambodia and Japan. Their Vietnam venture ill soft launch at the end of this year with more than 140 tables and 300 slot machines, and it is expected that over 70% of their initial revenue will come from VIP gamers. Suncity says more than 30% of the group’s revenue now comes from markets outside Macau, compared with 10% five years ago.
Meanwhile Cambodia's premier casino, NagaWorld, recently reported a 140% growth in VIP rolling turnover to $21.1 billion at the end of 2018 and expects its VIP operations to push its revenues over $1.43 billion mark, an increase of 54.9% per cent on last year’s return.
Also, the Philippine Amusement and Gaming Corp indicated that gross gaming revenue generated by the country’s VIP junket segment showed a 24.5% year-on-year increase to end the year at $995.4 million.
Early on, Dragon co-founder Paul Moynan focused on VIP gaming segment, e-gaming and i-gaming, all key growth industries with overlapping sectors and discovered several problems which Dragon Blockchain Innovation could solve while also coupling it with a growing demand. Dragon identified ways to solve critical issues typically associated with legacy business practices and has the ability to cater for the needs of each sector.
Another of Dragons pillars, i-gaming, is also experiencing fantastic growth and then market size is expected to double from the current amount of $46 billion to $94 billion by 2024. With the global e-sports market predicted to exceed a colossal $138 billion by the end of 2019 now is absolutely the right time to invest in Dragon Coin, the World’s number one entertainment coin and get hold of your feature-packed Dragon Social Wallet from your app store.
The junket model outlined earlier in this article is undeniably one of high risk, high reward, but with its complex system of junket organisers, middlemen and other intermediaries it is also one of high cost to the VIP / High Roller gamers. This is where Dragon Blockchain Innovation comes in to play to bridge the gap between technology and outdated traditional practices and dramatically reduce the cost of transitions for all stakeholders.
Disclaimer: Dragon assumes no responsibility or liability for any errors or omissions in the content of this article. Figures were obtained from a variety of sources and were believed to be correct at the time of writing. Readers are advised to conduct their own research and due diligence.