Could Mariana Islands Become the Next Macau?

Several years ago, Macau began booming and quickly became the world’s largest gambling destination. But with Macau struggling these days, could another Asian area become the next gambling capital, like say the Mariana Islands?

Located just east of the Philippine Sea in the western Pacific, and covering only 388 square miles, the US-owned Mariana Islands don’t seem like a prime casino haven. But junket operators have done a good job at shuttling wealthy Asians to the islands so far.

Junkets have been key to expanding the gambling economies of Macau, Singapore and Australia because they recruit and extend credit to VIPs. Recruiting the VIPs is important because gambling advertising is illegal in mainland China and some other Asian countries.

The key difference between the Mariana Islands and US is that the latter requires casinos to know their customers before recruiting them. This means that they can’t accept random high rollers from junkets due to fears of money laundering. But there are no junket restrictions in the US Commonwealth of the Mariana Islands

This has allowed junkets to engage in a thriving business model that sends VIPs to Saipan, the Mariana Islands’ largest island.

Gambling isn’t the only reason why wealthy Asian gamblers are seeing what the Mariana Islands have to offer. This island chain is a tropical paradise that has far more than just casino gaming to offer its visitors.

Saipan is particularly attractive because it’s located 2,100 miles from Macau, making it a reasonable alternative for Chinese high rollers who want to gamble elsewhere. And many Chinese VIPs are looking for for a new casino hub because China’s crackdown on corruption is filtering into Macau. Due to strict money laundering safeguards, Chinese high rollers must deal with government hassles even if they’re doing nothing wrong.

The Mariana Islands will only prove more attractive when there are additional gambling and resort options.

Fool.com reports that the only casino operator is Best Sunshine International, which doesn’t even offer a full-fledged hotel for high rollers. Despite the subpar conditions, the resort has already generated an average of $62 million each month in the first quarter, which is up 36% from Q4 of 2015.

Best Sunshine is set to open a better hotel in Q1 of 2017, which should boost the number of visiting Asian high rollers even more.