Macau Casino Operators Resume Marketing Activity In China
Macau casino operators are reportedly shifting their focus back to China after ceasing all marketing activities when Chinese authorities arrested 17 Crown Resort employees in October 2016.
According to industry sources, casino operators like MGM Grand, Las Vegas Sands and Galaxy Entertainment have restarted marketing activities in China and some are even hiring new staff.
Casinos are legally allowed to market resorts and all other side businesses like restaurants and theme parks in China as long as they do not directly promote their casinos.
Most major casino operators had pulled back from the market in the aftermath of the unexpected arrests of 18 Crown employees.
Crown rival Star Entertainment is yet to resume its operations in the market. It is said to be closely monitoring the situation. The casino had pulled its staff out of China after the arrests, despite operating within the law as it was not clear at that point of time if the crackdown was targeting Crown Resorts alone or on the industry as a whole.
According to sources, the companies resumed their activities in China since they believe that the clampdown on Crown isn’t indicative of a blanket ban on casino marketing activities. Additionally, China is a vital market for casino operators and cannot be ignored. Chinese high rollers have long been the focus of casino operators’ marketing efforts, wooing them through junkets by using attractive perks and multi-million credit lines.
Casino companies are confident about resuming operations in the mainland primarily because they believe that Chinese authorities are far more concerned about blocking illegal capital transfers of capital via casinos in Macau and Australia by high rollers.
The 17 Crown staff members who continue to remain under arrest were detained on charges related to gambling crimes. No further charges have brought against them and it could be months before that happens. Those arrested include the head of Crown's international VIP program who was on a visit to Shanghai.
Although revenue breakup between VIP and mass market for December isn’t available yet, gaming analysts believe that VIP gaming is on a strong upswing in Macau and this can trigger further action from Chinese authorities.
In a statement analysts from investment firm Nomura said,
In our view, Beijing remains focused on plugging holes in the capital flight bucket, primarily through junkets and, to a lesser degree, UnionPay. We believe that the recent growth spurt in Macau VIP revenues to over 20 per cent in November [four times greater than mass growth for the month] is not sustainable and that it could lead to negative policy responses from Beijing if it were to persist
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