Proxy betting: a competitive edge for Southeast Asia

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Casinos across Southeast Asia are benefiting from Macau’s crackdown on proxy betting.

 

[dropcap]A[/dropcap] minor regulation banning the use of mobile phones at VIP tables in Macau is already having a positive effect on revenues in Southeast Asia’s underdog casinos.

The reason is proxy betting. In its simplest form, proxy betting involves one person somewhere outside a casino giving betting instructions to an accomplice (the proxy), inside. The proxy buys chips, places bets per instruction and cashes in the winnings on their behalf. In more civilised settings, the casino provides a live video feed of its table games, meaning gamblers can watch the game played out from another city, or even another country, while instructing the proxy via mobile phone.

Under the watchful eyes of China corruption crackdown, proxy betting had become big business in Macau, offering casinos a cost-effective way of retaining high-stakes customers who want to stay out of the spotlight. Morgan Stanley estimates that as much as ten percent of Macau’s VIP revenues came via proxy gamblers.

This of course poses a problem for regulators clamping down on money laundering. So when industry analysts reported that during 2015 alone proxy betting could have grown by as much 15 percent in Macau, the Gaming Inspection and Coordination Bureau (DICJ) swiftly moved to ban the use of mobile phones at VIP tables that proxies rely on.

The immediate result has been that proxy betting is now booming in South East Asia, where less discerning regulators are unaware of or disinclined to tackle it. According to the report by Global Market Advisors partner, Shaun McCamley, in Vietnam, Cambodia and the Philippines, proxy betting is rife; some casinos rely on proxies for 90 percent of their revenues, while those that currently don’t offer it are now “looking very closely at including it as an additional gaming option to their players and agents.”

Offering proxy betting is relatively cheap to install compared to an online offering, and sidesteps any issues with regulation in the jurisdiction of the player (even if online gaming is legal for the operator it may be illegal for the player in mainland China).

McCamley suggests an eight table proxy betting solution should cost only $60,000 to set up, and should generate $897,000 net win by the end of the first year. The phenomenon is providing operators in less developed markets with an attractive edge, he says, in what is and will continue to be a highly competitive casino region, situated between the rising powerhouses of India and China, and all the VIPs therein. However, as these jurisdictions currently have no regulation to cover the practice, there’s no telling how long their luck will last.


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