A senior executive of Macau-based junket investor Tak Chun Group forecasts that the rolling chip turnover of the group’s VIP gaming clubs will expand by double digits of percent in 2018.
“Our conservative estimation is that there will be at least a 10- to 20-percent growth in rolling chip turnover. This matches the estimate of the market and that of the major investment analysts,” said Tsang Ka Hung (pictured), chief financial officer of Tak Chun.
“Currently, the customer volume and bet amount have both increased. With more customers and higher betting amount, it feels like the growth has returned to that in the 2013 and 2014 period before the fall of the market,” Mr Tsang said.
In 2013, casino gross gaming revenue (GGR) market-wide in Macau – another measure of industry performance – expanded by 18.6 percent year-on-year, mostly fuelled by high roller play, according to data from the local regulator, the Gaming Inspection and Coordination Bureau. In 2014, as late as November that year, the overall market had been heading for a modest GGR expansion, but ended up slightly negative judged year-on-year after a 30.4 percent GGR contraction in December 2014. For the following two years, Macau casino GGR contracted year-on-year, which some investment analysts said was spurred by an anti-corruption campaign in mainland China.
Tak Chun executive Mr Tsang made his comments about the current state of the market on Sunday on the sidelines of the opening ceremony for Tak Chun’s new VIP gaming club at the Plaza Macao, a casino property promoted by Macau gaming operator Sands China Ltd at the Four Seasons Hotel Macao.
The new VIP club has 12 gaming tables spread across four rooms, according to a press release issued by Tak Chun on Sunday. The document also said that it was the 18th VIP gaming club “under Tak Chun”.
Tak Chun told GGRAsia previously that the firm had 15 VIP clubs currently in the Macau market, including the newly-opened club at the Plaza Macao.
“Our VIP gaming clubs are usually in those five-star [casino resorts]. The trend is to ask for more than 10 gaming tables with four to eight rooms. Only with VIP gaming clubs of such scale can we satisfy the demand of our clients,” Mr Tsang said.
He added: “The customers now have a higher expectation on service [quality], so we need better-decorated venues, bigger rooms and more gaming tables, so as to provide customers with more choices.”
The firm clarified to GGRAsia on Monday that it had currently a further three VIP clubs “overseas”.
Lei Chi Wai, a director of Tak Chun, told local media earlier this month that the firm recorded an almost 30-percent “growth” in 2017. Mr Lei did not mention whether that was measured by VIP gross gaming revenue or rolling chip turnover. Mr Tsang confirmed on Sunday it was a reference to the latter.
The Tak Chun CFO also revealed that the performance of Tak Chun VIP gaming clubs during the recent Chinese New Year holiday period was “quite good”, with a double-digit expansion compared to the prior-year period. He did not specify what measure of performance was being used.
In other comments, Mr Tsang said enhanced regulation of the Macau junket sector would benefit the market.
“We agree on [the need for] regulating junket operators. Regulated and qualified operators will benefit the industry. As for [Tak Chun], we have always been adhering to regulations, be it on [anti-money laundering] and other operational procedures. I believe that [the changes on government regulations] will not have much effects on us,” said the executive.
He added: “The elimination of weaker operators [from the market] has nothing to do with regulations. It is [related to] the competition. There will always be new junket operators who join the market and the existing ones that exit. With a more stringent [regulatory framework], the smaller junket operators can only strive to adapt and stay in the market… I encourage competition in the market.”
Mr Tsang said his company had yet to hold meetings with local officials regarding possible further amendments of the regulatory framework. But he expected that changes would focus on the quality of junket operators and the demand for a higher capital deposit for licensed junkets.
The Macau government has said it plans to revise the city’s regulatory framework on the operations of the city’s junket operators. Several representatives of the junket industry told GGRAsia in January that the consolidation of the junket sector had plateaued, meaning that the number of licences was not likely to see any significant contraction this year.
In the meantime, Mr Tsang said that there “could be” one VIP room in Macau opened by Tak Chun in mid-year, with one to two more in the second half of 2018. But the CFO did not reveal the names of the casinos involved. He also revealed that the firm is currently communicating with “one to two” regions in Southeast Asia regarding the opening of VIP gaming clubs.
The Tak Chun executive said he thought the opening of new casinos in neighbouring jurisdictions served as an indicator of a strong growth in Macau casino business.
“This is because their clients are also people from mainland China. When there is an increase in the number of clients, the increase will take place in both the Southeast Asia market and the market of Macau. After all, mainland Chinese customers ‘like to visit’ those places,” Mr Tsang said.
Tak Chun was identified by analysts as among five junket operators due to launch new VIP clubs at MGM Cotai, the new casino resort operated by Macau gaming concessionaire MGM China Holdings Ltd.
Meanwhile, Tak Chun’s chief executive Levo Chan also talked to local media briefly on the sidelines of the opening ceremony.
“We will launch a new VIP gaming club in July. We are confident about the market,” he said, without revealing the location of the to-be-launched VIP gaming club.
Jun 11, 2021Japan’s Yokohama city concluded on Friday its request-for-proposal (RFP) submission period regarding commercial partners for its tilt at getting a casino complex or integrated resort (IR), as they...
”We have segregated floors amounting to about a hundred rooms – with two staff members per room – so that staff that live in Zhuhai can stay in Macau"
Deputy chairman of Success Universe Group, an investor in the Ponte 16 casino hotel