Macau Keeps Junket Industry in Check
The number of junket promoters in Macau will be capped at 50 market-wide for 2025, unchanged from 2024, the city’s Gaming Inspection and Coordination Bureau (DICJ) has announced.
Macau law also limits the number of junkets that each of the city’s six casino concessionaires may work with. Sands China and SJM Holdings, for example, are allotted 12 junkets each. MGM China and Melco Resorts each have eight junkets, and Galaxy Entertainment Group and Wynn Macau are capped at five through 2025.
In recent years, the city’s once-dominant junket industry has declined, along with VIP patronage. Earlier this year, Macquarie analysts Linda Huang and Howard Suen observed that gaming operators in the market “have been increasingly active on client engagement and conversion of junket VIPs to the direct VIP and premium mass segments.”
Junkets earn their money through commissions of up to 1.25 percent on rolling chip turnover, but are prohibited from sharing casino revenue in “any form” with their concessionaire partner, as part of the government’s stricter oversight of the sector.
Starting August 1, Macau’s Big 6 concessionaires will be the only entities that can provide gambling credit to casino patrons. Licensed junkets may ask a partnering concessionaire to extend credit to its players. Those arrangements would require notarized contracts approved by Macau’s Secretary for Economy and Finance.
In 2014, 235 junkets operated in Macau. Today, according to GGRAsia, there are just 22.
New Star CEO McCann Preaches Patience for Company’s Future
In an interview with the Australian Financial Review July 10, newly appointed Star Entertainment CEO Steve McCann indicated that it will take some time to rebuild before the company can think about a potential sale or merger.
When McCann stepped in as CEO of Star’s rival Crown Resorts in mid-2021, that company was sold for US$8.9 billion to Blackstone Group less than a year later. Crown has since regained its licenses in New South Wales (NSW) and Victoria.
This time around, though, McCann said that “stakeholder realignment” was a top priority. This includes Star’s internal makeup and its relationship with NSW regulators, which was shown to be incredibly tenuous during the previous regime. Star is currently awaiting a ruling from the Bell Two inquiry into the fate of its Star Sydney casino license, due by the end of the month.
“We don’t have a ready-made M&A transaction on the table,” he told the AFR. “No doubt there are a lot of people looking at Star and thinking, ‘Is there a play here?’ I don’t think we can afford to get too distracted on that at the moment. I think there is a solution, there is always a solution, but it is not going to happen overnight.”
Thailand IRs: The Next ‘Holy Grail’?
Before the Covid-19 pandemic, gaming analysts predicted that legal casinos in Japan would create a new “holy grail” of gaming, potentially reaping up to $25 billion in revenues per year and rivaling Macau for dominance. The global health crisis made short work of those projections, but industry experts are now waxing hopeful about Thailand.
In an opinion piece in Channel News Asia, analyst Daniel Cheng suggests that Thailand could fast-track its casinos, open in 2029, ahead of MGM Osaka in Japan, and even surpass Singapore as a global gaming destination.
Under Prime Minister Srettha Thavisin, elected last summer, Thailand is pursuing legal IRs with “lightning speed and efficiency,” Cheng wrote, “(contrasting) sharply with Japan’s meandering journey to enact its casino legislation,” with the hope of boosting the economy and drawing more international tourism.
IRs in Bangkok, Phuket and the Eastern Economic Corridor could generate up to $10 billion in foreign investment by global operators including Wynn Resorts, MGM Resorts International, the Las Vegas Sands Corp., Galaxy Entertainment Group and Genting Berhad. The kingdom could issue as many as eight licenses.
Korean Casino Industry Braces for New Competition
South Korea’s casino industry generated almost $2 billion in gross gaming revenue in 2023, up almost 41 percent over 2022. The new Mohegan Inspire resort in Incheon should further boost the sector.
But the industry in Korea has been warned to expect serious competition from Japan’s first integrated resort (IR).
In an opinion piece published by the Korea Times, Osaka research scientist Yang Hyung-eun said the $8.5 billion MGM Osaka, set to open in 2030, will pose a major threat to the Korean industry, which is made up of 17 casino resorts, including one, Kangwon Land, that is open to locals.
“The innovation of the Korean casino industry begins with a shift to the integrated resort industry policy in terms of future growth,” the researcher wrote. “Now is the time for a future vision and philosophy” for the South Korean casino industry.
Macau Casinos in a Summer Slump
Macau’s gaming industry missed revenue estimates for June due to sluggish tourism and what Bloomberg called “cautious sentiment among Chinese tourists.”
Gross gaming revenue (GGR) was up 16.4 percent year-on-year to $2.2 billion, according to the Gaming Inspection and Coordination Bureau. But it fell short of analyst projections (17.5 percent), dropped 12.4 percent from May, and was 25 percent shy of 2019 figures.
Travel to Macau typically sees a dip after the big Golden Week national holiday in May. Those who did visit—more than 70,000 in June—aren’t spending as much, due to ongoing economic uncertainty.
PAGCOR Chief: It’s POGO No More
Last fall, the Philippines gaming regulator announced that Philippine Offshore Gaming Operations would henceforth be known as Internet Gaming Licensees, or IGLs. The rebrand was meant to erase the taint of crimes associated with illegal offshore operations.
But the new name hasn’t caught on, and the much maligned operations are still known by the snappier sobriquet: POGOs.
The name change is part of PAGCOR chief Alejandro Tengco’s campaign to publicly rehabilitate offshore operations, which have been linked to crimes including kidnapping, human trafficking and online scams.
The furor around POGOs has caused a number of lawmakers to demand that the mostly Chinese-run enterprises be banned outright. But Tengco has resisted, saying the regulator and police are rooting out these illegal operators and shutting them down, while law-abiding POGOs bring jobs, enterprise and tax revenues to the country.
According to the Philippine Star, in a report shared on MSN, PAGCOR just issued new regulations for the offshore operations that could also help boost confidence in the legal industry.
Meanwhile, in a statement, Defense Secretary Gilberto Teodoro has said “these syndicated criminal activities … weaken our financial standing, our country ratings (and) corrupt our society.”
Japan IR Lead Named Head of Tourism
Naoya Haraikawa, onetime head of Japan’s Office of Integrated Resort Regime Promotion, has been named commissioner of the Japan Tourism Agency.
From 2018 to 2020, Haraikawa lobbied for the introduction of integrated resorts (IRs) with gaming in the country, and worked with tourism officials to develop regulations for the new industry.
As reported by GGRAsia, he also led a team that evaluated IR proposals submitted to the central government by Osaka city and prefecture and Nagasaki prefecture. Only Osaka was approved for licensure; it is currently preparing to break ground on an $8.5 billion casino complex spanning 700 acres on Yumeshima Island in Osaka Bay. The IR, a project of MGM Resorts International and Japanese financial firm Orix Corp., is expected to open in 2030.
A total of three IR licenses were made available in the first round of bidding. No plans have yet been announced to request additional proposals.
