Macau Recovery Results In More Junkets Operators Applying For Licenses

November 3, 2017 by Paul Butcher

Macau’s casino industry started its recovery in August 2016 and over the last 12 months things have continued to improve in the biggest gambling hub in the world. Macau witnessed 22 percent increase in gaming revenue last month and the VIP gaming market has also showed signed of growth.

Data from the Macau government show that casino gross gaming revenue (GGR) has expanded by 35 percent year-on-year in the third quarter of 2017.

During the third quarter, gambling revenues in Macau have been boosted by growth in the high-roller VIP segment from an increase of 57.7 percent in 2017, as compared to 52.1 percent in the same quarter of 2016.

When Macau’s gaming industry collapsed due to the anti-corruption crackdown, junket operators took a major hit and a number of them were forced to close and withdraw from Macau. Insiders in Macau’s playing field said that a big chunk of junket promoters are now returning to Macau and want to be licensed by the government as VIP gaming promoters. Junkets are agents or sub-agents who bring in wealthy VIP Chinese players to Macau’s casinos. Since they are usually from mainland China, these junkets are able to use their connections to encourage high-value players to take their money to Macau.

The dilemma is that these junkets more often than not are not licensed as VIP promoters. If a junket is a VIP promoter, then the junket is authorized by the city’s government to arrange player credit. The junket operator is also tasked with collecting money from a player who loses at the casino. According to U lo Hung, a Macau junket operator and the Chairman of the VIP club known as “CCUE” which operates at the Altira Macau, there has been an increase in the number of VIP gaming junkets in 2017.

Kwok Chi Chung, president of the Association of Gaming and Entertainment Promoters believe that these junkets are in fact seeking to get license as a promoter firm at the Gaming Inspection and Coordination Bureau (GICB). GICB is in-charge of restricting the number of junkets a licensed gaming promoter can work with. They have the final say whether to approve or reject a junket operator’s application based on gaming regulations.

While more junkets seek licenses, the gaming regulator has become more stringent in its selection of junket promoters. In January this year, a total of 126 licensed gaming promoters were listed in Macau as compared to 141 from last year. This data came from the list of licensed operators published every January by GICB. Two years ago, Macau had as many as 183 licensed junkets in the city.