The Macau government has kept at 50 the cap on licensed gaming promoters – also known as junkets – for the year 2027, unchanged from the previous three years.
The 2027 limit is still likely to be much higher than the city’s actual number of operating junkets over that coming 12 months. That is because the junket VIP segment remains “marginalised” in the local market amid competition from Macau casino operators acquiring VIP players directly, suggested veteran junket promoter U Io Hung, who heads the Macau Gaming Promoter Professionals Association.
The 2027 limit was set by the city’s Secretary for Economy and Finance, according to an update published on the website of the local casino regulator, the Gaming Inspection and Coordination Bureau (DICJ).
The government has also for 2027 maintained respective caps on the number of junkets with which each of the city’s casino operators can work. Those figures are also the same as the previous three years.
Sands China Ltd and SJM Holdings Ltd have the largest allowance: 12 junkets each. MGM China Holdings Ltd and Melco Resorts & Entertainment Ltd each have a cap of eight junkets. Galaxy Entertainment Group Ltd and Wynn Macau Ltd have respectively a cap of five junket partners.
The market-wide junket cap stipulated by the government is a “disconnect” from the actual business environment of the Macau gaming sector, Mr U remarked to GGRAsia.
Macau had 29 licensed junket operators as of July 7, according to the gaming bureau’s update. From that tally, the number of active junkets is likely to be “fewer than 20”, said Mr U.
The Macau government can determine the annual junket cap based on factors including the “development policy” for the gaming sector, and the operating conditions of each of the casino concessionaires, according to Law No.16/2022, which regulates the licensing terms and business practices of junkets.
The Macau junket VIP trade remains “heavily impacted” by direct VIP acquisitions from the casino operators, and therefore the number of operating junkets is much lower than the government-stipulated cap, said Mr U.
Those direct VIP marketing efforts include ‘referral’ play, which typically involves the introduction of a patron to a gaming venue by a fellow patron, the veteran junket boss noted.
“The casino operators are offering the same kind of VIP [gaming] service directly to patrons. But then, the Macau junkets are still bearing the 5-percent levy.
“Hence, there’s less room for us to offer rebates [to patrons] that are as competitive as the direct VIP service from the operators,” said Mr U. He was referring to a 5-percent withholding levy payable by junkets on commissions that casinos provide to junkets.
Until December 31, 2022, Macau junkets had been able to benefit from prior regulatory arrangements allowing them either a total or partial exemption from taxation relating to junket commissions or to remuneration in kind, such as transportation, accommodation, food and drink, and entertainment.
Following the Macau government’s new regulatory stance with effect from 2023, that had no longer been possible.
Mr U suggested in his Tuesday comments that – as no significant changes were anticipated in the regulatory and operating conditions in the Macau VIP gaming market in the coming year – the current number of Macau licensed and active junkets was unlikely to see much variation.
