Mar 30, 2022 Newsdesk Latest News, Macau, Rest of Asia, Top of the deck  
Macau “used to be the gaming mecca in Asia, with VIP gaming as a major source of gross gaming revenue [GGR]” says a firm linked to Macau casino junket investor Alvin Chau Cheok Wa. But Suncity Group Holdings Ltd added, in its annual results filed on Wednesday, that in Macau “the reliance on VIP business has already gone”.
The speeding of the unwinding of the Macau junket market had coincided with Suncity Group Holdings’ former chairman Mr Chau being detained in Macau in November, on suspicion of promoting cross-border gambling to Chinese customers. Mr Chau, also formerly boss of privately-held casino junket group Suncity Group Ltd, is no longer able to give financial support to Suncity Group Holdings, the latter noted in its 2021 results.
On Sunday, Macau Golden Group, a veteran presence in the city’s VIP gambling market, and a long-term junket-investor partner to local casino operator SJM Holdings Ltd, became the latest in the sector to say it was to terminate “all” VIP gaming operations with effect from Wednesday (March 30).
Suncity Group Holdings has interests – via a network of associated businesses – in casino projects in respectively, Vietnam, the Philippines, and the Russian Far East.
The group said that in future it would be focusing not on Chinese gambling customers but on “the rise of the mega-rich and middle-class customers in South Korea, Japan, Singapore, Thailand, Malaysia, the Philippines etc,” which were the “fundamentals of demand for high-quality integrated resorts with a localised theme in Asia”. Mainland China has been having a well-flagged crackdown on cross-border gambling.
Suncity Group Holdings added: “There is fairly limited supply of VIP gaming facilities to cater to high-end demand since Macau has now virtually left the VIP junket business.”
The firm said that, via a total bank balance and cash of HKD1.6 billion (US$204.4 million) and a net asset position of HKD4.8 billion, its management team “carefully navigates the Asian gaming sector”.
In its annual results, it addressed the issue of cost cutting, after slipping to an annual loss equal to US$30 million, and having its auditor issue a disclaimer.
The group “consolidates all resources on survival,” it stated. “Intense cash preservation across segments tops the group’s highest priority,” it added, noting it had “executed the most uncompromising cost-cutting programme ever”.
Suncity Group Holdings stated: “Survival means chopping everything non-core. Underperforming non-core businesses have been sold and will continue to be sold.” Such steps had included in 2021 the disposal of a mainland China property business and also of an aircraft.
Referring to its investment in a Vietnam casino resort, the company said: “Management has also turned Hoiana into a temporary quarantine hotel; assertively cutting operating expenses while we tried our best to avoid disruption to guests’ experience in Hoiana as a world-class integrated resort.”
In Japan, land it held in Niseko, Hokkaido; and in the Miyako Islands in Okinawa prefecture, had been for “non-core hotel developments and the group may consider offloading them,” said the Hong Kong-listed firm.
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