Macau Casinos Win $844M in November, as Chinese Gaming Hub Remains in Chaos

Posted on: December 1, 2021, 09:31h. 

Last updated on: December 1, 2021, 11:43h.

Macau casinos combined to win MOP6.75 billion (US$844 million) off gamblers last month, a marginal 0.01 percent increase on November 2020, but 55 percent better than October.

Macau casinos GGR Alvin Chau junket Suncity
Macau casinos, seen above, gained some short-lived momentum in November. But any optimism has been curbed because of the recent arrest of Suncity junket mogul Alvin Chau. The outlook on the casinos is unsettled, as VIP promoters face heightened scrutiny in the Chinese gaming region. (Image: Bloomberg)

Macau’s six licensed commercial casino operators experienced their best gaming month since July. However, their November 2021 GGR total remains down 70.5 percent from the pre-pandemic November 2019. That’s when the gaming venues jointly won more than $2.85 billion.

November 2021 was largely within analyst expectations. The increase in GGR from October was due to Macau and mainland China lifting mandatory 14-day quarantine requirements on travelers moving back and forth between the two jurisdictions.

Through 11 months, total 2021 GGR in Macau stands at $9.83 billion. While that’s up 50 percent on 2020, the number is $23.8 billion less than what the casinos had won with a month to go in 2019.

Junking Junket Industry

Macau’s six casino giants are slated to see their operating rights terminate next June. The Chinese enclave is amid a review of all aspects of its gaming industry — the world’s richest prior to COVID-19 — in an effort to better regulate gaming and the flow of mainland capital through the gaming floors.

After years of staying mum on potential changes, it’s emerged recently that junket groups are being heavily scrutinized and targeted by local and mainland authorities. Alvin Chau, the face of the VIP junket industry, was arrested last week on charges of allegedly running illegal gambling enterprises throughout China.

Chau’s Suncity isn’t the only junket organizer that has faced a probe in Macau. GGRAsia relays today that several other prominent junket groups have been the subjects of operational inquiries by mainland prosecutors since last year.

Meg Star, Tak Chun, and Guangdong Club are three such gaming promoters that have reportedly been scrutinized.

Chau announced his resignation from his Suncity Group yesterday. Macau casinos later confirmed that they were closing their VIP gaming rooms that have long been Suncity designated gaming spaces.

Junkets, which helped propel Macau from a small gaming market controlled by the late “King of Gambling” Stanley Ho to winning a world-record $45 billion in 2013, have become the scorn of China President Xi Jinping over the past five or so years. Xi believes the massive movement of mainland money through casinos poses a national security risk for the People’s Republic.

With Chau and several of his closest associates in custody in Macau, casinos will need much more than COVID-19 going away to come anywhere near the gaming numbers they experienced just a few years ago.

Casino Stocks Crash

Since Chau’s detention, shares of Macau’s publicly traded casino stocks have plummeted in value.

Over the past week, Las Vegas Sands shares have dropped nine percent, MGM Resorts three percent, Wynn Resorts 11 percent, Galaxy Entertainment 8.2 percent, Melco Resorts more than 12 percent, and SJM Resorts five percent.

Paired with ongoing COVID-19 concerns and the recent clampdown on Chau and Suncity, the largest junket group in Macau, analysts are bearish on the future of the Chinese gaming hub. There’s good reason, as junket groups brought around 70 percent of Macau’s VIP volume to the region prior to the pandemic.