Macau Junkets, Once a Thriving Part of the Market, Now Down to 37
Posted on: March 31, 2022, 08:45h.
Last updated on: April 1, 2022, 09:59h.
The junket segment in Macau continues to shrivel. As the relationship between the city and the once-popular segment continues to fracture, additional operators will close.
There was a time when Macau’s casinos relied heavily on junkets. They brought in high-rolling, wealthy gamblers by the boatload and helped fatten the gaming properties’ wallets.
Those days are over. It became obvious a couple of years ago that junkets were no longer receiving the same attention as before. But the breakup accelerated last year. There were 85 junkets at the beginning of 2021, there are now less than half that amount.
There were 235 junket operators serving the Macau gaming scene eight years ago. By 2019, the number was just 100. With the city revamping its gambling laws, junkets became unwelcome under their current modus operandi.
There were 46 junkets when 2022 began. Today, according to the head of the Gaming Inspection and Coordination Bureau (DICJ, for its Portuguese acronym), Adriano Marques Ho, there are just 36.
Junket Market Shrinking Rapidly
There were 37 until yesterday. Macau Golden Group ceased to exist as a junket operator in the city after requesting the cancellation of its license earlier this week.
Many operators anticipated this day would arrive. Some, like Wynn Resorts’ Wynn Macau, previously noted that there was less reliance on VIPs and a greater focus on mass gaming. That trend will continue, especially as China exerts pressure on Macau.
Diversifying the city’s tourism market doesn’t necessarily mean less casino action – it could mean more for everyday people who aren’t spending the same level as the VIPs.
New Junket Era Still Unclear
Junkets aren’t facing automatic elimination. They can alter their business model to fit the new regime. Many, however, apparently don’t want to. They are concerned, in part, about the lack of clarity regarding how Macau’s new gambling laws will impact the market.
The new laws will require that the local government approve contracts between junkets and casino concessionaires. This is part of a desire to increase supervision in the sector, according to an Executive Council press release.
The agreement stated that every Macau junket would only be able to work with one Macau casino concessionaire in the future. Additionally, individuals cannot act as junkets. Only companies can be licensed junkets.
The bill also includes criminal penalties for what authorities call “illegally taking deposits” from the general population by junket operators. The bill suggests that offenders face prison sentences of five years for violations.
Macau has seen a number of high-profile cases in recent years of large deposits being taken from investors. These cases were often involving junkets. It was not unusual for Macau junkets to raise capital to fund their rolling chip program. They offered private investors higher-than-market interest rates on their deposits.
The newly-announced bill heads to the Legislative Assembly this month, where it will be put to a vote. Final approval will depend on how long it takes for the procedure to be completed. The city’s legislators can also change the bill during this process.
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