MACAU BUSINESS
Alidad Tash holds a similar approach. “I don’t think
junket revenues will go straight to zero. A reasonable estimate would be half of the already-diminished revenues”.
The gaming consultant indicates that “for casinos, the impact would be small, since junkets accounted for 10% to 15% of their EBITDA in 2019, and even less since then. Cutting that in half is in the mid-single digits”. Nevertheless, another impact might be looming beyond the VIP segment. “The biggest impact, in my opinion, is on premium mass
players, many of whom come from mainland China”, according to Mr Tash who highlights that “those Players have relied on junkets to bring money over to Macau, allowing them to bypass the annual US$50,000 limit per person”.
T
Gaming concession extended if current law not revised on time – CE
he Macau SAR Chief Executive has stated that the current gaming concession could be extended beyond their set June, 2022 expiration deadline if works to revise the current gaming law and prepare the future concession public tender are not
completed on time. The current law sets 20 years as the maximum period for gaming concessions, with authorities able to extend the concessions for up to five years. All six concessions and sub-concessions are set to expire in
June, 2022 with no indications provided by authorities so far on if the concessions will still be extended before that deadline. “After the [revision of gaming] law is completed, we will
gradually implement the relevant works. Please don’t worry. If the works could not be completed on time like the tender process, we could extend [the licenses], a condition that has already been stipulated in the current framework of [gaming] law [..] We have the mechanism [of extending the existing licenses],” Ho replied in the question and answer session after his policy address at the Legislative Assembly. “We will try our best to do our work but we will carry out
the tasks step by step to be in tandem with the healthy development of the gaming industry. The six gaming operators are very clear about this — the healthy development [of the sector] — and the government will not get them in trouble”. The public consultation on the proposed gaming law
revision finished on October 29. “The content of the public consultation is currently being summarized. […] The law will reveal issues related to the gaming industry, with the nine major directions for the sector have been clearly defined in the law,” the CE added.
22 JANUARY 2022
This could mean that “given premium mass’s much higher profit margin, it is quite possible that ironically, their impact on the casinos’ bottom line would be larger (worse) than the junket segment”. The Suncity case and the latest developments in the
city’s casino industry prompt a reflexion on the way forward for the industry. The days may be numbered for business as usual when it comes to what hitherto have been the Macau-style junket activities. “A Singapore-style junket system is very possible,
whereby junkets will cease their illegal activities, and provide a lot more transparency. Effectively, they’ll become glorified travel agencies, with a marketing arm”. As a result, “casinos will rely more on the healthy grind
mass and mass mass segment, and less on premium mass, premium direct and junkets”, Mr Tash ponders.
D
Maintaining long- term investments main goal – Gaming operator reps
espite the pandemic downturn gaming operators have maintained their long-term investment in the SAR while imposing cost reduction measures that could maintain their
local human resources, representatives from the six concessionaires stated in a session held by the Macao Gaming Summit 2021. The panel discussion on the industry’s
recovery from COVID-19 included Sam Chong Nin, Sands China Vice President of Corporate Communications & Community Affairs, MGM China Chief Strategic and Financial Officer, Kenneth Feng; Melco Resorts SVP and General Manager of Altira Macau and Mocha Clubs, Raymond Lo; Galaxy Entertainment Group SVP of Public Relations Buddy Lam; Assistant Vice President of Research, Planning and Strategy for Wynn Macau and Wynn Palace, Dr Jason Ni; and Chief Operating Officer – Finance & Development for SJM Resorts S.A., Benjamin Toh. The talk was moderated by Professor Davis
Fong, director of the Institute for the Study of Commercial Gaming, professor in the Faculty of Business Administration at the University of Macau, as well as a Legislative Assembly member from 2017 to 2021. The show, formerly known as the Macau Gaming Show, has been held every year since 2013, apart from 2020 due to the pandemic, with organizers opting for a one-day online conference this year on November 17.
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