SINGAPORE (Dow Jones)--Singapore's casino regulator has issued its first-ever junket-operator licenses to two agents, in a move that hands one of the city-state's two casino resorts a coveted avenue to expand its lucrative premium-player business.

The long-awaited move comes more than two years after Genting Singapore PLC (G13.SG) opened the island nation's first-ever casino resort in February 2010, and is seen by analysts and casino operators as vital for facilitating the local gaming market's next phase of growth. But the immediate impact on the gaming market is unclear, given the small number of licenses and the novelty of the junket industry here, observers say.

In a statement issued Thursday, the Casino Regulatory Authority said it has issued its first batch of one-year, "international market agent" licenses to two applicants, and is currently evaluating and conducting probity checks on other applications.

The newly minted junket promoters will be permitted to bring high-spending overseas gamblers to Genting Singapore's Resorts World Sentosa casino in exchange for commission, and will be allowed to issue credit to these premium players.

While junkets--a lynchpin in Macau's gaming industry--do cut into casinos' margins, they can help drive business volumes, as well as reduce credit risk and chances of bad debt, because they could be more familiar with their clients' financial standing.

Las Vegas Sands Corp.'s (LVS) Marina Bay Sands, the other casino resort licensed to operate in Singapore, currently doesn't have access to licensed junkets. Regulations require a casino operator to sponsor junket applicants before licenses are issued to them to operate at that particular casino.

Since lifting its longstanding ban on casino gambling in 2005, Singapore has established a stringent regulatory regime on the industry, including tough probity checks and licensing for junket operators, so as to allay public fears of the specter of organized crime that is widely associated with Macau's highly lucrative junket industry.

The CRA didn't provide the number of outstanding applications or say when those checks might be completed, but said that it has already rejected 12 applicants so far.

A spokesman for Resorts World Singapore said they were "delighted" by the issuance of junket licenses.

"The addition of [junket] business for the overseas VIP market will bring a progressive new source of high net-worth play into our gaming environment. This will bring economic benefits for both Resorts World Sentosa and Singapore," the spokesman said in an emailed statement.

"The move is positive in the sense that we now know for sure that junkets are welcome in Singapore, and their experiences will help pave the way for more approvals to come," said OCBC Investment Research analyst Carey Wong.

"But without knowing who these junkets are and what parties they represent, it is hard to figure out what sort of impact they could have for now. There are also a lot of kinks that need to be ironed out by the junket and casino operators," Wong added.

Officials at Marina Bay Sands weren't immediately available for comment. Las Vegas Sands executives have previously said MBS hasn't yet sponsored any junket applications.

Analysts have expected Singapore's burgeoning gaming market to challenge the Las Vegas strip as the world's second-largest gambling hub in terms of gross gaming revenue last year.

--By Chun Han Wong, Dow Jones Newswires; +65 64154 160; chunhan.wong@dowjones.com

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