Govertsen: “A better quality customer”
Gross gaming revenues in Macau were up 23 percent to US$2.9 billion for the month of November, bringing year-to-date GGR to more than $30 billion for the first time since 2014, when the historic 26-month industry recession kicked in. The results beat the predicted 19 percent increase forecast by a Bloomberg survey of seven analysts.
“Macau continues to see a better quality gaming customer,” Union Gaming analyst Grant Govertsen told the Las Vegas Review-Journal. “In other words, lower quality visitors are generally being replaced by higher quality visitors.”
Growth has been strongest along the Cotai Strip, where Sands China, Wynn Macau, Galaxy Entertainment Group and Melco Resorts & Entertainment all have a presence. At the same time, the Review-Journal reported, SJM Holdings and MGM China have lost market share due to delays in completing their Cotai resort projects. MGM Cotai is due to open in January, just before the Chinese New Year, while SJM’s Grand Lisboa Palace may not open until almost 2019.
Union Gaming forecasts Macau gross gaming revenue to grow in the mid-teens in 2018, for almost $38 billion—still short of the $40 billion-plus generated in 2013 and 2014.
Despite the crackdown on money laundering, graft and corruption that sparked the 2014-16 downturn, Macau authorities have “an uneven understanding of major risks related to regional organized crime, cross-border movements and corruption” in relation to movement of illicit funds, according to GGRAsia.
A report on money laundering from the Asia/Pacific Group said the number of investigations into suspected money laundering “do not match the risk profile” for the city.
“There have only been five money laundering convictions,” said the report, completed in July but only recently released in its entirety. “A shortage of prosecutorial resources in the Public Prosecutions Office, heavy evidentiary requirements for third-party money laundering, and the lack of an adequate policy directive have hampered the quantity and quality of money laundering investigations and prosecutions, resulting in a low conviction rate, with a correspondingly low average sentence length ranging from three to five years for just the money laundering offense.”
In 2016, Macau’s Gaming Inspection and Coordination Bureau revised its anti-money laundering statutes but kept the threshold set for reportable transactions at MOP500,000 (US$62,200), far below the threshold in many countries. The U.S. State Department has repeatedly called for Macau to reduce the threshold “to bring it in line with international standards”; in the United States, casinos must report any suspicious transaction of $3,000 in funds or other assets.
Bloomberg reports that robust GGR can be attributable in large part to the return of high rollers; VIP revenues grew more than 28 percent in the first nine months of 2017, outpacing mass. Among the newest VIP rooms in Macau is the Meg-Star Lian Sheng, which just opened at Wynn Macau. According to a press release issued by the junket operator, the opening “marks the company’s vigorous expansion in Macau, adding another success to its thriving business.”
Rival junket firm the David Group has also talked about expanding its business. The group launched three new-to-market VIP rooms in Macau market this year, at Studio City, the Macau Roosevelt Hotel and Galaxy Macau.
In related news, Macau officials currently have no plan to license so-called gaming “collaborators,” sub-agents who work with licensed VIP junkets. But DICJ Director Paulo Martins Chan says the regulator would consider public disclosure of collaborators’ names.Currently, DICJ lists the city’s licensed junket promoters on its website, but not their collaborators.
