MACAU BUSINESS By Paolo A. Azevedo By Tony Lai


Jeju – the new Singapore


Jeju will be as big as Singapore in terms of Gross Gaming Revenue, predicts Lawrence Teo. The Chief Operations Officer and Vice President of Dream Tower, the tallest Integrated Resort under construction on the Korean destination island, explains to Macau Business why Lotte Tour decided to enter the casino business and create a landmark. All bets are on making the casino resort the crown of the tourism jewel the company has been dominating for four decades


Sunset Industry “N


ext year will, at least, not be worse than this year.” It was the remark made by junket operator Suncity Group boss Alvin Chau Cheok Wa two years ago as he looked forward to what fortune would


bestow on his business in 2020 and beyond, after a slight decline of 3.4 per cent in the city’s gross gaming revenue in 2019. Little did he, or others in the industry and the community, know at the time, a great deal of economic and financial havoc would be caused by the COVID-19 outbreak — and there would be a series of incidents that would change the industry forever. Starting with Mr. Chau’s fall from grace that has


snowballed into the closure of a number of VIP rooms managed by junket operators across the city in the past few weeks, the sector seems to have finally run out of the luck it has enjoyed in the past few decades by enticing Mainland Chinese high-rollers to splurge on gaming tables in Macau, the sole place on Chinese soil that casino gambling is legal. Following the arrest and detention of Mr. Chau among a


18 OCTOBER 2017


group of 11 people in Macau in late November over alleged charges of money laundering and running an illegal gambling syndicate — shortly after the mainland Chinese city of Wenzhou issued a separate arrest warrant for him due to accusations of engaging in illicit cross-border and online gambling activities — all Suncity Group VIP rooms in the city, which numbered as many as 17 in the peak days, were closed on December 1. The disintegration of what analysts had described as the largest junket operator in Macau has sent shock waves across the industry: some of the six local gaming operators were reported to have ceased cooperation with all junket operators, also known as gaming promoters in the government’s terms. Wynn Macau Ltd has confirmed the collaboration with all


M 16 FEBRUARY 2022


junkets had been terminated by the end of 2021, which would be “beneficial to the long-term and healthy development of Macau”, while Melco Resorts and Entertainment Ltd and Sands China Ltd are believed to have followed suit. Only SJM Holdings Ltd has so far indicated it would continue the cooperation with gaming promoters at least until the end of their current agreements. Tak Chun Group, a major junket operator here, also


remarked that some of its VIP rooms were closed because “individual casinos” had suspended their partnership.


Clear message and uncertainties


“We think the message from the government is clear, in that junkets’ proactive gambling promotion (such as credit extension, [foreign exchange] transfer, among others) for mainlanders will not be tolerated,” brokerage JP Morgan commented in a recent research note. “This will not only cripple junkets’ ability to bring VIP players (to any jurisdictions, including Macau), but also prompt casino operators to reconsider their relationship/association with junkets, in our view, especially into this critical license renewal period.” A seasoned Macau junket investor and representative, Luiz


acau Business – From Lotte World, a major recreational complex [with the world’s largest indoor theme park, in Seoul] to an integrated resort with casino in Jeju. A different beast. A


natural evolution? Lawrence Teo – Business is the same. But building


a landmark. M. B. – The group [Lotte] has created other landmarks in different types of business. Why would this be different? L. T. – Yes, Lotte Group has already created


Lam Kai Kuong, agrees the authorities did not have to issue any direct order for the six gaming operators, which would cease partnerships with gaming promoters on their own given the expiry of their gaming licenses by June 2022. “With their licenses up for renewal, as well as the dismal performance of the VIP sector in the past two years over the COVID-19 pandemic, it’s not difficult to understand why some gaming operators have decided to cease operation with junket operators to just be safe,” he says. “They might resume the collaboration in the future if


to do the Dream Tower in Jeju. Lotte here is being just a family company; we’re a different company [Lotte Tour]. It’s not going to be [just] the tallest and the largest building in Jeju, that’s just the hardware. We say that a landmark should be the most visited destination, where tourists will go to eat, shop and maybe [visit] our observation deck. A must-visit point destination. Because of the hardware, and also the software.


downtown Seoul and Lotte Super Tower. We’re trying


there are any changes, but they just want to avoid any risks at the moment with so much uncertainties,” the veteran adds, also referring to a recent verdict by the Court of Final Appeal that gaming operators sharing liability with gaming promoters on deposits in VIP rooms, which has also been reported as one of the major reasons behind the end of the partnerships between some operators and junkets. The industry is now in the stage of “confusion and fear”,


M. B. – What are the main goals that you definitely


want to achieve with this Integrated Resort (IR)? L. T. – Number one EBIDTA on IR in Korea. There’s


The latest arrests and closure of some VIP rooms might not exactly spell the final days of junket operators in Macau, which might still linger after a reset, but these might mean the recovery of the gaming industry back to the pre-pandemic level is almost impossible in the foreseeable future, if not entirely unfeasible, say analysts


Macau Business has asked the regulator, Gaming Inspection and Coordination Bureau (DICJ), about the latest situation of the cooperation between gaming operators and promoters but did not receive a reply before press time.


according to Mr. Lam remarks: “What the government should do is to come clean about what junket operators are allowed to do and what activities are deemed illegal. As long as we know clearly about the red tape, we could avoid any illicit acts.”


In the wake of the junket turmoil in recent weeks, Chief


Executive Ho Iat Seng only spoke publicly in late December that the authorities had “no interference” in the collaboration between gaming operators and promoters,


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52