GGRAsia – Macau posts 11-pct decline in number of licensed junkets

Macau posts 11-pct decline in number of licensed junkets

Jan 25, 2017 Newsdesk Latest News, Macau, Top of the deck

The total number of licensed gaming promoters in Macau – also known as junkets – shrank by 10.6 percent over the past 12 months.

The total fell from 141 in January 2016 to 126, according to a list of licensed operators published on Wednesday by the city’s gaming regulator, the Gaming Inspection and Coordination Bureau. The figure includes both companies and individuals licensed as junkets.

In January 2015, Macau had a total of 183 licensed junkets.

The gaming regulator did not provide on Wednesday an explanation for the decrease in licensed junkets. Last week, the director of the gaming bureau, Paulo Martins Chan, had already hinted at the decline. He said it was partly due to the bureau not renewing the permits of some junkets that failed its inspection of their financial accounts.

Gaming promoter licences are issued or renewed by the local regulator on an annual basis.

Over the past three years, Macau recorded a net reduction of more than 90 in the number or licensed junkets, show official data.

According to investment analysts covering the Macau gaming industry, the decline in the number of junkets is connected in part to stricter operating rules for the sector. These began to be implemented from 2015, following an alleged fraud case amounting to tens of millions of U.S. dollars that rocked the Macau VIP gambling segment. At the time, Macau junket operator Dore Entertainment Co Ltd, an operator of VIP facilities at the Wynn Macau casino hotel, announced it had been a victim of internal fraud by a former employee.

Another factor putting pressure on junkets is the ongoing slowdown in high roller play. Gross gaming revenue (GGR) in VIP baccarat – a segment heavily reliant in Macau on junket operators – fell by 6.9 percent in 2016 across the whole Macau market, to approximately MOP118.96 billion (US$14.87 billion), according to official Macau government data published earlier this month. GGR in VIP baccarat has declined for two consecutive years after peaking at MOP238.52 billion in 2013.

The softening casino business environment in Macau – described by investment analysts as partly due to China’s ongoing anti-corruption campaign – has led several junket operators to cut back their operations in the city. Many junkets shut down VIP rooms during 2015 and 2016. Some have started to explore opportunities in other regional markets, including the Philippines, Cambodia and Vietnam.