Insight
MACAU IGamiX
Ben Lee, Managing Partner, IGamiX Management and Consulting Ltd
Ben Lee is the Managing Partner at IGamiX Management and Consulting Ltd based in Macau and is acknowledged as one of the region’s experts in the Asian gaming market and has extensive gaming experience all over Asia and Australia.
www.igamix.com
great.things@
igamix.com
Macau junkets: a necessary component in the overall offer
Interested in the shifting dynamics of Macau’s junket industry, G3 talks to Ben Lee, Managing Partner at IGamiX Management and Consulting about the crackdown on financing channels and the impact of the changes on the recovery of the Macau market following strict control measures in 2020
China has been cracking down on the money channels since 2014, but has ramped up efforts to that end recently. Bearing in mind that the Chinese players whom Macau relies on for virtually all its gaming business face enormous roadblocks when it comes to sending any funds overseas, those more recent clampdowns have had and will continue to have a depressant impact on all segments of Macau’s gaming industry, not just the VIP sector.
How does the Junket system work in Macau?
Macau does not have much of a domestic mass base, virtually all our gaming revenue comes from outside our border, which in our case is China. It is illegal for the mainlanders to gamble, to promote gambling in China, to organise trips for the purpose of gambling and to collect gambling debts. It is also illegal for anyone to remit more than US$10k per annum.
So enter the junkets. Tey fulfil a necessary evil and do all the functions that the casinos are not able to do. Te junkets are loose pyramids of agents and sub agents of which the travel agents sit at the very bottom of. As such they are able to perform many of the functions above without collectively being held responsible.
How will the crackdown on financing channels used by online gambling operators affect the junket market?
China has been cracking down on the money channels since 2014, but has ramped up efforts to that end recently. Bearing in mind that the Chinese players whom Macau relies on for virtually all its gaming business face enormous roadblocks when it comes to sending any funds overseas, those more recent clampdowns have had and will continue to have a depressant impact on all segments of Macau’s gaming industry, not just the VIP sector.
P54 NEWSWIRE / INTERACTIVE / MARKET DATA
In terms of the crackdown on online gaming and Macau, surprisingly most of the noteworthy Macau junkets have had very little to do with the online business.
Te simple reason is that they have lots more to lose if they are no longer licensed in Macau. What we have seen is that the online sector is dominated by parties straight out from China with no landbased presence. Tere is some intersection between the landbased and online but those tend to be the minor junkets operating on the fringe.
In turn how will this affect Macau’s recovery?
Tis means that our recovery will be much slower than our previous recovery from SARs and the financial crisis. It will be gradual and much more controlled.
Revenue figures for 2019 in Macau were already dropping partly because of the US-China trade war. What is the outlook for this year?
Tat is a salient point that most people pointing to a rapid recovery are overlooking. Te manufacturing and export sector, our prime source market for gamblers, are relocating to Indochina and that trend will continue. What that means is that new regional centres will develop, taking the cream off what was once Macau’s.
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