• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Features
  • Industry Talk
  • Trends & Tech
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Macau junket bad debt far exceeds HKD30 bln: Kwok

May 24, 2016 Newsdesk Latest News, Macau, Top of the deck  


Macau junket bad debt far exceeds HKD30 bln: Kwok

Bad debt in the Macau junket segment – i.e. money owed by VIP players in relation to gambling credit and not paid back within a pre-arranged period – “far exceeds” HKD30 billion (US$3.9 billion), said Kwok Chi Chung, president of the Association of Gaming and Entertainment Promoters.

“Bad debts of Macau junkets far exceed HKD30 billion [on aggregate],” stated Mr Kwok.

He indicated some bad debt was associated with junket businesses no longer in the Macau market.

“Counting the peak at 230 junkets [in the Macau market] in 2013… on average each one of them had HKD200 million of bad debt… [so] that would amount [Macau-wide] to HKD46 billion of bad debt. And this amount is already a very conservative estimate, not to mention the bad debts of the sub-agents,” stated Mr Kwok.

He added: “Some small [junket] operators with only five or six gaming tables, their outstanding bad debt even amounted to over HKD1 billion [per junket].”

The junket sector representative was speaking on the sidelines of the recent Global Gaming Expo (G2E) Asia 2016 casino industry trade show and conference in Macau. His comments were reported on Monday by Chinese-language media in Hong Kong.

Mr Kwok says his group represents some of the largest junket brands in the Macau market.

A report in April on the Macau VIP gambling market by brokerage Daiwa Securities Group Inc had estimated that the sector had HKD30-billion in what it referred to as “healthy” bad debt. But Daiwa noted that figure excluded receivables related to what it termed “side-betting” – understood to be a reference to what is known in the local industry as the ‘multiplier’ – as well as to aged and what Daiwa referred to as “bad” bad debts. The brokerage added the HKD30 billion figure was “a very conservative estimate”.

With the ‘multiplier’, the player and a junket representative reach a secret agreement that the value of the bet declared ‘on the table’ should be multiplied by a certain number of times in the form of an ‘under the table’ wager.

The Macau government’s recently published “mid-term” review report of the local casino industry mentioned the possibility of using undercover investigators to combat what the report referred to as “side betting”. The move has been welcomed by Mr Kwok and others in the junket segment.

On May 6, the Macau government already had announced that the use of telephones by those sitting at VIP gambling tables would be banned with effect from May 9.

Use of telephones at tableside can facilitate what is known in the industry as “proxy betting” whereby a gambler not physically present in the gaming room can communicate via telephone or other digital device to instruct a “proxy” sitting at the table – usually a junket representative – to make a bet on the person’s behalf.

In a note on May 16, Daiwa said it estimated that proxy betting’s contribution to overall Macau VIP betting volume had grown year-on-year in 2015.

Daiwa had said that – based on conversations with junkets and other industry participants – it thought phone betting had grown about 15 percent year-on-year in 2015, to account for approximately 20 percent of junket gaming volume in Macau that year, compared to 8 percent to 10 percent in 2014.

In comments to GGRAsia published on May 10, Mr Kwok had said that the de facto proxy betting ban would translate into a 10 percent year-on-year decline regarding sector-wide monthly turnover for junkets in Macau.

Monthly casino gross gaming revenue (GGR) in Macau has fallen year-on-year for 23 months in a row. In May the GGR decline trend is likely to reach a two-year milestone, say several investment analysts, although they also see some stabilisation in GGR when the numbers are judged month-on-month.

“According to our industry sources, based on the most recent week’s play, GGR in Macau for the month of May is tracking down approximately 10 percent year-on-year but up 5 percent month-on-month,” said David Katz and Brian Davis of Telsey Advisory Group LLC in a note on Monday.

“Month-to-date average daily revenue is approximately MOP636 million [US$79.5 million] which continues the path of market stabilisation and recovery (in addition to some seasonality strength),” said a Monday note from Vitaly Umansky, Simon Zhang and Clifford Kurz from brokerage Sanford C. Bernstein Ltd in Hong Kong.


  • tweet
Related articles
  • SJM posts US$390mln 2020 loss, Cotai scheme in 1H
    SJM posts US$390mln 2020 loss, Cotai...

    Feb 23, 2021  

  • Macau casino GGR soared in final days of CNY: brokerages
    Macau casino GGR soared in final days...

    Feb 23, 2021  

More news
  • Aristocrat to launch EGM-based responsible gaming features
    Aristocrat to launch EGM-based...

    Feb 26, 2021  

  • Suncity to open clubs at Londoner Macao, Lisboa Palace
    Suncity to open clubs at Londoner...

    Feb 26, 2021  


Latest News

Aristocrat to launch EGM-based responsible gaming features

Aristocrat to launch EGM-based responsible gaming features

Feb 26, 2021  

Casino slot machine maker and digital games provider Aristocrat Leisure Ltd says it plans to launch in the first quarter this year a new product with responsible gaming features, which has already...
Read More
Suncity to open clubs at Londoner Macao, Lisboa Palace

Suncity to open clubs at Londoner Macao, Lisboa Palace

Feb 26, 2021  

Tech supplier Crane ups forecast for 2021 core sales

Tech supplier Crane ups forecast for 2021 core sales

Feb 26, 2021  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Partners

Pick of the Day


US$53.4 million

Adjusted EBITDA reported by Asian casino operator Melco Resorts and Entertainment for the fourth quarter of 2020



Most Popular

  • Macau casino GGR soared in final days of CNY: brokeragesMacau casino GGR soared in final days of CNY: brokerages February 23, 2021
  • Pansy Ho sells off more stock in MGM Resorts for US$36mlnPansy Ho sells off more stock in MGM Resorts for US$36mln February 23, 2021
  • Macau removes last mainland cities from its quarantine listMacau removes last mainland cities from its quarantine list February 23, 2021
  • GEG in US$1.6bln construction deal on Galaxy Macau Phase 4GEG in US$1.6bln construction deal on Galaxy Macau Phase 4 February 22, 2021
  • Macau VIP challenged by changes in China: Galaxy Ent bossMacau VIP challenged by changes in China: Galaxy Ent boss February 25, 2021
Copyright 2014-2020 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us