Junket Operators Reduce Drastically In Macau

Macau’s casino industry continues to struggle to recover not only because of the consequences of COVID-19 and its impact on tourism but also because China has adopted implemented some stringent laws in 2021 that have a direct impact on Macau’s junket operators.

If you are not familiar with the term junket operator, it refers to an organization that serves as the middle man between the casino operator and the player.

Junket operators have specialized in bringing a VIP clientele to casinos in Macau and around the world. These high value customers end up spending 6 to 7 figures in each of their casino trips and provide huge business to casino operators.

All of Macau’s top casino operators which include Sands Macau, Wynn Macau and MGM Macau have relied heavily on junket operators to bring in VIP gamblers who used to account for more than 50 percent of their gross gaming revenue.

Beijing passed a new law on March 1, 2021 that made it a criminal act for anyone engaged in offering cross-border gambling services. This is exactly what junket operators do in Macau. However, the law was designed to prevent junkets ferry Chinese VIP gamblers to overseas casinos. This was because Beijing wanted to stem the flow of money leaving China as it was impacting the value of the yuan.

Some market analysts claim that the law wasn’t designed to stop junket operators from helping Macau’s casinos as Macau is very much part of the People’s Republic of China. However due to the grey area of this law, junket operators are not willing to take the risk and break the law in an attempt to provide VIP business to Macau’s casinos.

The Macau Association of Gaming and Entertainment Promoters (MAGEP) has noted a significant decrease in junket operations during the last 18 months. Kwok Chi Chung who is the President of MAGEP said that Macau’s VIP sector will not be the same anymore and he would not be surprised if there are only one or two major junket operators left in Macau.

Junket Operators Must Reinvent Themselves

Junket operators in Macau need to reinvent themselves quickly to stay in business. They need to move away from VIP clientele and look at mass gaming as this is what Macau’s government wants to encourage. Some junket operators are now offering a lot more attractive perks and comps to mass players when compared to casino operators in order to get them to do business through them.

By the end of 2021, we will have a better idea as to whether Macau’s junket operators will recover or if junket operators will fade out slowly.