IAG December 2015 - page 7

December2015
inside
asiangaming
7
Cover Story
“Some junketshaveaPlanB–buyall or
partof casinos. JimeiGrouphas shown
theway, longoperatingFontanaHot
SpringLeisureParks in thePhilippines
plusaMacau casino.”
forecastan imminentVIP rebound,UnionGaming’sGrantGovertsen
expects more junket closures, possibly including “one of themajor
players… carriedout on a stretcher.”
Some junkets have a Plan B – buy all or part of casinos. Jimei
Grouphasshown theway, longoperatingFontanaHotSpringLeisure
Parks in the Philippines plus aMacau casino. Hengsheng Group is
building a hotel in Saipan and has taken steps toward developing
an integrated resort in South Korea. Suncity Group,Macau’s largest
junket promoter, has invested in a Vietnam IR project as a starting
point for larger ambitions.
Suncity Chairman Alvin Chau characterizes casino investment,
as a partner and eventually sole owner, as a natural evolution of
its junket business rather than a reaction to Macau’s woes. “The
reason why we invest in overseas markets is not because of the
bad business conditions inMacau,” Mr Chau says. “VIP business
globalization is a strategy, and a casinohotel chainbusiness is part
of that strategy.” (See more of IAG’s interview with Mr Chau on
page 10.)
PROSPEROUSMETAMORPHOSIS
“Junkets are going to continue tomorph and evolve with the times,
by selling or joint venturing part or all of their business to casino
owners or becoming casino owners themselves,” Macomber
International President Dean Macomber says. “The better junket
owners and operators will not suffer; indeed, they will prosper from
thismetamorphosis.”
As China continues opening to the global financial system and
adapting to world standard business practices, the unique role of
junkets for players from themainland and other Asianmarkets will
diminish, and casinoswill becomemorewilling to takeon traditional
junket functions, including player finance, Mr Macomber, a former
CEO of Jimei’s Fontana resort, suggests. “It may take 10 years, 20
years, 50 years and certain pure boutique style junket companies
will still exist, but beside the repercussions of the decrease in VIP
play, evenmore fundamentally, junkets as middlemen can’t survive
big company corporate ownership, which does not like sharing their
profits with others. This inevitability was put inmotion themoment
Macau gaming was opened to large Western and Asian gaming
operators.”
“Junkets don’t want to be the wedding dress,” Pacific Financial
Services founder Tony Tong says, citing the Chinese saying that the
weddingdressgetsusedon thedayof thewedding then is forgotten.
“Sooner or later they lose their customers to casinos.”
Industry insiderssay it’snogreat leap for junkets thatoperateVIP
rooms inMacau to run theirowncasinos.There’sa rangeofopinions
about junkets’ capital capabilities as investors and whether casino
operationor junket promotion is themoreprofitablebusiness. Jimei,
Hengsheng and Suncity illustrate different approaches to junkets
becoming casinoowners.
FontanaHotSpring
TonyTong
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