The coronavirus pandemic already decimated the Macau casinos, but the pain continues to compound for one of the major sources of revenue for the Chinese enclave.
Following the local authorities operation against the biggest junket supplying high roller traffic to the Macau casinos, Suncity Group Holdings Ltd., along with the arrests of it’s chairman Alvin Chau and 10 others, the casinos in the enclave informed Macau’s Gaming Inspection and Coordination Bureau that they have severed their ties with Suncity. In addition, beginning December 1st, all high roller rooms the junket has previously enjoyed at various casinos, will be suspended.
Suncity and Mr. Chau are accused of soliciting casino gambling, including incentivizing online wagering, in mainland China, where nearly all forms of gambling are strictly illegal. In fact, Macau is the only place in the country where gambling is legal, much like Las Vegas used to be in the United States, and Suncity and other junkets are an integral part of delivering foot traffic to the Macau casinos from the mainland. The junkets not only help the casinos find high rollers, but take care of VIP travel, accommodations, and debt settlement, to name a few of their services.
Following the announcement by the Macau casinos, their stocks declined even further, the prices of local subsidiaries of world-recognized casino names such as Wynn and Sands, now well down to multi-year lows.
The high roller casino players are a huge part of the revenues of the local casinos. According to some accounts, more than half of Macau’s total gambling revenues in 2018 cam from the VIP players. And thanks to the legal framework encompassing gambling in China, the majority of those VIP players came from mainland China. With the perceived demise of one of the biggest junkets in Macau, the future of the casinos there is as uncertain as it has ever been.