A Macau junket boss has confirmed to GGRAsia that there has been suspension of some junket VIP gaming rooms in the city and some job layoffs, adding that the trend could grow if tourism doesn’t improve in July amid the ongoing Covid-19 crisis.
“Several VIP gaming rooms in Macau have already been suspended, and those are of both the major junket promoters and the smaller-scale ones,” said U Io Hung, a local junket boss and vice president of a local industry lobby group called the Asian Responsible Gaming Alliance, in a telephone interview with GGRAsia.
On Thursday Macau’s Chief Executive, Ho Iat Seng, had appeared to acknowledge the pressure the city’s junket sector was currently under, as the local casino market faces possibly a third month of GGR contraction in the 90s of percent, coinciding with a slump in tourism linked to a raft of travel restrictions in the region.
Previously the Macau government has called for local casino-sector employers to avoid job layoffs. It had been reported in early March that one Macau junket brand had rehired circa 200 people after having attempted to lay them off.
On Thursday Macau’s leader noted as part of a number of comments on the sidelines of a public event regarding the outlook for tourism recovery: “There are some junket rooms that have reduced their workforce, that is actually normal.”
Mr Ho had also stated: “The government cannot impose too much interference on corporate actions.”
The junket sector’s Mr U told us: “Whether or not Mr Ho expressed his understanding of the gaming sector’s situation, the layoff situation is bound to happen.”
The VIP gaming boss added: “Several junkets [employers] have already frozen or reduced the pay to their staff, though haven’t fired them. But this won’t last for long – it will eventually result in more layoffs because there is simply no way that the employers can withstand the pressure of having no clients.”
“In July, I would expect that there could be some five or six more junket rooms that are run by the larger-scale operators facing suspension. If that happens, that absolutely spells out the possibility of even more junket employee layoffs,” Mr U added.
Suncity Group, usually regarded by investment analysts as the largest-single Macau junket investment brand by rolling chip volume, said in a statement at the end of May that it had recorded a loss from February to May this year.
Suncity Group had said additionally it would use its “fiscal reserve” – which it defined as its accumulated earnings – to make up for any “shortfall” in its accounts. That was understood to be a reassurance to associates. Suncity Group also stated it would pay the full salary amounts of what it said totalled 4,500 employees.
No end in sight
The lack of clarity on when Macau might see a return of gaming patrons in meaningful numbers made it hard for junkets to plan effectively. Options such as unpaid leave for junket staff had already been pursued but could not run indefinitely, noted Mr U.
“Even if there is a certain travel easing happening with [Macau and] Hong Kong in July, do you think the supporting services like flights and ferries can all return to normality?” Mr U told GGRAsia. He is a long-term investor in Macau junket rooms and is linked to the Macau government-licensed gaming promoter entity “Pacific Intermediário Sociedade Unipessoal Lda”.
The “only remedy” for recovery of the Macau junket sector was “the resumption of Individual Visit Scheme” visas, said Mr U. He was referring to China’s outbound visa system also known as IVS, allowing mainland residents from selected cities to travel independently to Macau and some other places. The scheme had been paused in January amid the emergence of the novel coronavirus linked to Covid-19 infection.
Mr U’s lobby group recently met with leading officials of Macau’s Labour Affairs Bureau. Also attending was Leong Sun Iok, a Macau legislator associated with the Macau Federation of Trade Unions.
Mr U’s side had urged local government help in providing job placements and subsidised vocational training to junket employees that have “departed their companies or are on non-paid leave”, stated a press release published on Thursday by Mr Leong’s office citing the conversations in the meeting.
As of January this year – prior to the onset of the Covid-19 crisis – Macau had on record a total of 95 licensed junkets. The tally marked the seventh consecutive year of decline in licensed junket numbers in the Macau market.
It remains uncertain for now if some local junkets would choose to surrender their licences later this year due to the fall in business amid the pandemic hit, Mr U told GGRAsia.
Apr 16, 2021Macau’s VIP gross gaming revenue (GGR) in the first quarter of 2021 reached nearly MOP9.13 billion (US$1.14 billion), up 19.7 percent sequentially, according to data released on Friday by the...
Apr 16, 2021
Tax revenue collected by the Macau government from the city’s gaming industry in the first three months of 2021