May 17, 2017 / 11:01 AM / 3 months ago

Macau audits more junkets amid widespread scrutiny of gaming sector

Paulo Chan, director of Macau's Gaming Inspection and Coordination Bureau, attends a news conference in Macau, China May 17, 2017.Farah Master

MACAU (Reuters) - Macau has stepped up its audit of the lucrative junket industry, the gaming regulator said on Wednesday, as the world's biggest gambling hub improves oversight of its main source of revenue amid an anti-graft campaign by the Chinese authorities.

Junkets, middlemen who lure high rollers with credit on behalf of casino operators and settle their debt afterwards, contribute just over half of Macau's total casino revenues, a key source of income for the government.

The cash flows and clients of these companies, however, have been subject to greater legal scrutiny due to concerns over money laundering.

Paulo Chan, director of Macau's Gaming Inspection and Coordination Bureau known as the DICJ, told reporters the junkets so far audited had mixed results.

"We have done 40 junkets, some are good, some need some improvement, we have told them to improve their accounting system," he said, adding that the current number of licensed firms was "balanced" at 120.

Macau, a special administrative region in China, is the only place in the country where Chinese nationals are allowed to gamble in casinos.

Casino revenues had plummeted as the anti-graft campaign by President Xi Jinping kept gamblers away, but income has rebounded over the past nine months as more mainlanders returned.

A former assistant public prosecutor, Chan has increased regulatory scrutiny of the gaming sector since taking over the DICJ in 2015. He said the current contribution of the junkets to Macau's gaming revenue -- 53 percent -- was acceptable, with more run-of-the-mill gamblers making up the rest.

"This is a good proportion, we want to keep going with this," he said.

Macau is highly dependant on the gambling industry, with taxes from casinos accounting for over 80 percent of government revenues.

The tiny territory, home to 600,000 people, is trying to diversify away from gambling and the authorities have forced new casinos being built on the reclaimed Cotai Strip to include significant non-gaming attractions such as theme parks.

Reporting by Farah Master; Editing by Miral Fahmy

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