Macau’s casino concessionaires are on the verge of terminating all contracts with junket promoters in a move that would put an end to the junket industry before the end of the year.
In the past 24 hours IAG has continued to hear that discussions are taking place at all six concessionaires, with the general theme being that all existing agreements with junkets will be terminated by the end of December.
IAG has also seen a letter from one concessionaire to a junket terminating their agreement this month following a new directive from Macau’s Gaming Inspection and Coordination Bureau (DICJ) banning the issuance of credit.
IAG understands some of the six concessionaires are adopting a “wait and see” attitude, hoping other concessionaires will pull the trigger in the coming days, but it now seems likely that within a very short space of time all six will either announce the decision publicly, or it will become common knowledge within the industry.
While each concessionaire is somewhat constrained by the terms of their individual agreements with each junket, a role may also be played by the pending 1 January deadline for the licensing of junkets for 2022 by the DICJ.
Some industry experts have speculated that Macau junkets could survive as “international marketing agents”, more akin to the “travel agent” style of international gaming promoter authorized by Singapore and US regulators, no longer offering credit or operating separately branded VIP rooms on a revenue share basis with the concessionaires.
It is not yet known how the DICJ will approach junket re-licensing – or even whether licenses will be issued at all – with the number of licenses having already been on a downward trajectory from a high of 235 in 2013 to just 95 in 2020 and 85 in 2021. The number of licensed junkets has fallen in every year bar one since 2013.
In a statement, the DICJ said it has not yet received any notice from concessionaires around the termination of junket operations. However, as reported by IAG, all Macau VIP Clubs run by Suncity Group were closed last week following the arrest of CEO Alvin Chau for alleged criminal association, illegal gambling and money laundering. The Hong Kong listed entity, Suncity Group (HK: 1383), which holds Suncity’s interests in the existing IRs Tigre de Cristal in Vladivostok, Russia and Hoiana in Hoi An, Vietnam, as well as developing the Resorts World Westside IR in Manila, Philippines, continues to trade.