GGRAsia – Macau junkets drop out weighed by costs, rules: reps

Macau junkets drop out weighed by costs, rules: reps

Jan 04, 2024 Newsdesk Latest News, Macau, Top of the deck

Of Macau’s 18 currently-licensed gaming promoters – entities also known as “junkets” – only three are new to market, with the rest being existing junkets that have operated for some time in the city and have sought licence renewal, say respectively Macau junket veterans U Io Hung and Kwok Chi Chung in comments to GGRAsia, based on their review of the latest roster published this week.

The tally is much lower than the Macau government’s cap of 50 for the whole market – which Mr U and Mr Kwok say indicates many formerly in the sector lost interest in trying to keep going, amid high operational costs, coupled with a stringent regulatory environment.

Mr U, president of trade body the Macau Gaming Promoter Professionals Association, told GGRAsia: “There were junket operators that no longer had the will to work in this market because they got old, or they did not have enough people to take up the business.”

He added: “There were also existing junkets – that were linked to Macau satellite casino operations – that chose to exit gaming promoter business.”

Satellite venues in Macau are third-party owned venues that make use of the gaming licence of those among the city’s six concessionaires that wish to collaborate with them.

Mr U said examples of satellite-linked junkets now out of the sector included Novo Clube VIP Legend, Sociedade Unipessoal Lda, that worked with gaming and hotel services group Macau Legend Development Ltd; and Joy Wave Diamond – Promotores de Jogos, Sociedade Unipessoal Lda., that worked with the now-defunct Casino Diamond.

Both junkets had been on the January 2023 list of licensed gaming promoters issued by the Macau casino regulator, the Gaming Inspection and Coordination Bureau (DICJ) but don’t feature on the 2024 list.

Mr U also noted to GGRAsia: “There were also some other entities that sought to continue as a licensed junket, but were embroiled in some lawsuits… and this is deemed by the [Macau] authorities as a [suitability] risk.”

The scale of Macau’s licensed junkets had shrunk to what Mr U described as a historic low, but not because “casino operators lost interest in signing agreements” with them, the junket trade representative added.

“This is more a problem where the junket sector is facing high operational costs, with that tight regulatory framework” including “the guarantee we need to pay, the share capital… and the full enforcement of the 5-percent withholding levy on commissions paid to us [by casinos] without any waiving,” being offered by the city’s government, Mr U added.

In the heyday of the junket sector about a decade ago, there were more than 200 licensed junkets, according to gaming bureau data.

Mr Kwok, another local junket veteran, told GGRAsia many had dropped out because they could no longer “secure sufficient patrons” and had been either unable or unwilling to adjust to the new operating environment.

The total number of licensed junkets in Macau has declined to 18 this year from 36 in 2023. “But even out of those 36 licensed junkets” declared on the 2023 list, “only around a dozen were really active,” Mr Kwok said.

Last month it was announced that the Macau government was proposing that the city’s licensed junkets be banned from themselves issuing credit to any gamblers using the local casinos. If the proposal is passed by the city’s Legislative Assembly, it would become another challenge for the junket sector in terms of its chances of thriving, remarked respectively Mr U and Mr Kwok.

Mr Kwok saw a glimmer of hope. “At least you saw three new entrants to the junket sector. For years the regulating authority did not license any newcomers,” the sector veteran noted to GGRAsia.