MACAU BUSINESS
“The primary source of patrons is still Mainland China at the moment,” – U Io Hung says
prospects of junkets. “While seeking to maintain social and economic stability domestically, the recent amendment to China’s criminal law [enforced in 2021] that penalises the organisation of cross-border gambling trips has broader global implications,” Macau scholars Ryan Ho Hong Wai and Jenny Phillips said. “The penalization of junket trips has accentuated the
irreversible divide between the national interest and the gambler recruitment model traditionally upheld by the junket community in Macau and across Asia,” they wrote in a journal article recently published in Gaming Law Review.
Sourcing from Mainland and Hong Kong This change has prompted both casino junkets and concessionaires to seek gaming patrons beyond Mainland China, but the outcomes have been mixed thus far. “The primary source of patrons is still Mainland China at the moment,” explains Mr. U. “It’s easier said than done. The recruitment of overseas gaming patrons and high-rollers depends on other factors such as flight capacity and local transportation infrastructure, which are beyond our control.” On the other hand, another local junket veteran, Luiz
Lam Kai Kuong, points out that some junkets have been redirecting their focus from Mainland China to nearby Hong Kong as their source of patrons. “The revision of the criminal law in Mainland China has fundamentally changed the dynamics of the junket segment in Macau,” he says. Apart from the geographical proximity and the shared
language and culture, Hong Kong is a logical choice, as it previously contributed around 15–20 percent of Macau’s gaming revenue in the pre-Covid era, trailing behind Mainland China. Hong Kong gamblers also do not face capital transfer restrictions when moving money to Macau, unlike their mainland counterparts, Mr. Lam adds. Despite the recovery witnessed this year, he asserts that the operating environment for junkets in Macau remains challenging. The competition with the in-house VIP operation of concessionaires for high-rollers is particularly tough, as the new gaming law limits junkets to receiving commissions based on rolling chips from concessionaires. “Some gaming operators offer greater benefits to high-rollers [compared to junkets], including more rolling chips, complimentary hotel stays, food and beverage coupons, as well as free tickets to shows and other entertainment offerings,” he adds.
Different views Prior to the restructuring of the junket segment, casino concessionaires had already been gradually shifting their focus from the VIP segment to premium mass and
24 OCTOBER 2023
in-house VIP operations. According to the latest data from DICJ, the VIP segment, which includes operations managed directly by gaming operators and those assisted by junkets, now constitutes less than 25 percent of the Macau market in terms of gaming revenue. This marks a significant decline compared to the early 2010s, when the VIP segment accounted for as much as two-thirds of the market. In the recent casino industry event held in Macau, Global Gaming Expo Asia (G2E Asia), Hubert Wang, president and chief operating officer of Macau gaming operator MGM China Holdings, stated junkets only represented a small portion of the market at the moment—less than 3 percent of the gaming revenue generated at its properties was through junkets. “The future of VIP business is really about in-house. We have seen old junket customers converted to in-house or premium mass,” he said at the time. But Mr. U holds a different perspective, attributing
the insignificant contribution of junkets to the limited access they have to gaming tables. “For instance, when a concessionaire operates approximately 750 gaming tables, junkets can only access around 20 tables, which is less than 3 percent of the total,” he illustrates. “In view of this small number [of gaming tables], junkets are making a considerable contribution to the gross gaming revenue.” “We are in a different era now,” he further
elaborates. “We have moved beyond the time when junkets had control over one-third of the gaming tables in casinos and made a substantial contribution to the overall gaming revenue.”
Exchanges with regulators Apart from the businesses in the city, Mr. U explains that local junkets have also continued to pursue partnerships with overseas casinos. “The local junkets have established connections with numerous casinos around the world. Wherever our patrons wish to go, we are capable of arranging their visits,” he notes. Some of the former Macau junket agents and
executives who lost their jobs due to the closure of their employers in recent years have also been recruited to work overseas, and their new roles involve recruiting and enticing VIP gamblers for the casinos, including those in Vietnam and South Korea, he adds. Recognising the ongoing challenges faced by gaming
promoters in the local business environment, Mr. U hopes to improve communication and exchanges with the regulator. “I have been in the industry for years, but I have only had three meetings with DICJ so far—these meetings were not utilised for mutual exchanges, allowing [DICJ] to gain a better understanding of our business environment and challenges,” he says. “Instead, they were solely focused on [DICJ] informing us about the latest changes in measures and policies.” Despite the challenges, the junket veteran firmly
believes that they still have a significant role to play in the future of the Macau gaming industry. “The reason is simple — the role of gaming promoters is clearly defined in the new gaming law, and it is an integral part of the industry,” he concludes.
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 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76
