Wynn Macau, Melco to Shut Junket VIP Rooms by December 21
Posted on: December 7, 2021, 08:10h.
Last updated on: December 7, 2021, 10:21h.
Wynn Macau and Melco Resorts & Entertainment said Monday they would close junket VIP rooms at their Macau properties within the next two weeks. That’s according to sources who spoke to Bloomberg News who are said to be familiar with the matter.
The anonymous sources said Wynn Macau informed junket operators that the luxury high-roller rooms would be shuttered by December 20. Melco will close its rooms a day later, December 21, they added.
The junkets are feeling the impact of the arrest last month of billionaire Alvin Chau, chairman and CEO of Suncity, the world’s biggest junket operator.
Chau was detained by authorities in Macau after a warrant was issued for his arrest, initially by prosecutors in Wenzhou, mainland China.
Junket Days Numbered
The focus on Chau is part of a wider crackdown by Beijing on cross-border gambling and those who facilitate it. Chinese prosecutors accused Chau of overseeing a network of 12,000 junket agents who catered to at least 80,000 wealthy gamblers based on the Chinese mainland.
Macau authorities say they have built a separate case against Chau related to the operation of offshore online gambling that illegally targeted the Chinese market.
Chau’s arrest coincided with a ruling by Macau’s highest court that casino operators can be held liable for junket debts. It’s a judgment that will render the relationship between the casino and junkets far less convenient, and possibly untenable.
The importance of junkets to Macau’s gaming economy has diminished in recent years. A 2015 crackdown by Beijing on the VIP gaming segment forced casinos to pivot towards mass and premium-mass markets. But junkets still account for around 75 percent of the gambling hub’s $3 billion in annual VIP gaming revenue, according to Bloomberg.
Suncity is believed to control around 40 percent of the Macau junket industry.
Chau’s arrest is a shot across the bow for the junket industry, which Beijing believes is responsible for enabling capital flight.
It’s a warning, too, for casino operators. Macau’s six licensed operators, or concessionaires, will see their concessions expire in 2022.
This is the first relicensing since the liberalization of Macau’s casino industry in the early 2000s. And it’s clear that Macau authorities, under the watchful eye of Beijing, have different ideas about the next licensing regime.
In September, Macau’s gaming regulator DICJ announced plans for a regulatory overhaul that would impose more stringent oversight on the casinos.
Stocks plummeted on the news. Many investors saw it as a power play by Beijing on autonomous Macau, as it seeks further control of capital outflows that put pressure on the foreign exchange rate.
Should the junkets survive this transition, they may finally be killed off in 2024, when Macau’s cash-heavy economy could be replaced by the digital yuan.
Beyond the closure of VIP rooms, there was further evidence this week that Macau’s casino operators were preparing for life without the junkets.
Bloomberg’s sources said operators were preparing to increase the number of gaming tables in mass-market areas, while allocating more staff to VIP gaming operated by the casinos themselves.
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