Macau gaming operators are in active conversations with the city’s licensed junkets, with a shared goal of increasing VIP revenues.
Gross gaming revenues (GGR) in the city’s top industry continue to improve six months after borders reopened, and junkets are part of the comeback, said Nelson Kot, president of the Macau Comprehensive Social Research Association, in comments to Asia Gaming Brief.
The junket system, which caters to VIP players, was overhauled last year due to China’s crackdown on capital flight and money laundering. The number of licensed junkets has dropped over the years, from 235 in 2015 to fewer than 50 today.
Two of the biggest—Suncity and Tak Chun—collapsed after their CEOs were convicted on charges of illegal gambling. Alvin Chau and Levo Chan were both given lengthy prison sentences: 18 years and 14 years, respectively.
Under the new rules, junkets are now permitted to only work with one concessionaire, limiting their scope. They may no longer share gaming revenues, and can only receive a commission of 1.25 percent of rolling chips from concessionaires. Junkets also are no longer allowed to operate their own VIP rooms, which could be perceived as a plus, since they no longer have to make the associated investment.
“Many junkets are waiting to observe the markets before engaging with the clients,” he told AGB. “They are waiting for casinos to give more benefits, as they can’t choose which casino to bring their clients to. They still endeavor for the best offering, such as free hotel rooms, free ferry tickets and others.”
According to Kot, junkets are enthusiastic about the city’s mandate to increase non-gaming amenities to broaden the customer base beyond gamblers and bring in more international tourism.
The latest data from Macau’s Gaming Inspection and Coordination Bureau (DICJ) show that revenue from VIP baccarat was about MOP8.56 billion ($1.06 billion) in the first quarter of 2023, about one-quarter of the city’s total revenue of MOP34.6 billion ($4.28 billion) for the period.
Kot said “none of the gaming operators want to drop VIP segments,” which cater to high rollers, “despite the new gaming legislation implementing more restrictions on junkets.
“I believe the future VIP revenue will continue to ramp up with more junkets back to work,” he said, and added that more junkets could return over time. “Some people who have good connections with high-spending gamblers could apply for a junket license with the DICJ.”
