Number down 13.5 percent from 2017
The number of junket operators in Macau, down 13.5 percent from January 2017, is likely to be unchanged during 2018. There are currently 109 licensed junkets in the city, down from 126 a year ago, for a fifth consecutive year of decline. In January 2013, Macau had 235 licensed junkets, according to official data.
The decline is attributable in part to a two-year downturn in Macau’s gaming industry that started in mid-2014 and only began to ease in August 2016. That recession was sparked by the Mainland China government’s crackdown on money laundering and corruption, followed by a widespread flight of VIP players—the junkets’ bread and butter.
Speaking to GGRAsia, Kwok Chi Chung, president of Macau’s Association of Gaming and Entertainment Promoters, said, “As the gaming industry has undergone more than two years of an adjustment phase, a large reduction has been seen in the number of individual junkets.”
Some of the junkets do not meet stricter license renewal conditions, said Kwok. “Some others just gave up.”
He added, “While the major junket operators here have been expanding their operation venues, those smaller ones that have not been able to meet the turnover requirement were just naturally kicked out from the market.”
Others joined forces in a wave of consolidation in the sector. Andrew Lo Kai Bong, chief investment officer of junket investor Suncity Group, said, “This industry has already grown to such a large scale that it is not easy for any new start-ups to enter it.”
Paulo Martins Chan, director of the MGTO, says the Macau government is proposing a higher capital deposit for any licensed casino junkets newly registered in Macau. The junkets’ shareholder structure, suitability and financial strength are also areas that the government would consider going forward.
Lo called it “positive news for the VIP gaming sector. That means junkets that are not financially strong or weak in management would be out.”
However, with the VIP sector back on a roll, some analysts say 2018 may see a resurgence of junket numbers.
