Macau, the Chinese enclave, and its casino industry had a rough 2019. The slow and steady decline in VIP traffic continued and this was felt by all operators.
With that, the junket operator industry was bound to feel the burn as well. Now, the extent of that burn is public knowledge as this market sector shrunk by another five percent.
This is a continuation of the troubling times for junket companies which began a few years ago. Now, only 95 junket companies are remaining. The Gaming Inspection and Coordination Bureau published the same figures, where the local news took over and propagate further. At the end of 2018, 100 companies were in the game. A year later, the number was down to double digits. This has not been breaking news in the same industry.
Almost two years ago, president of the Macau Association of Gaming and Entertainment Promoters, Kwok Chi Chung said that the sector will shrink. He noted events like the ongoing US-China trade war, a shift in the mass market and lack of smoking lounges as reasons for dropping junket revenue.
He was very close to the truth. Gaming revenue saw a drop of 3.4 percent year-on-year and the VIP visitor numbers are still in the slumps.
Mass market, although ascendent, did not manage to compensate the numbers for any level of positive growth. This shift will be possible in the future, but this will demand new investments from the casinos. Without them, most will not be able to attract the mass market that is more interested in entertainment and affordable family deals than in gambling. The outbreak of the coronavirus will do nothing to help either the casino or the junket operator industry.
The hard economic times are not the only reason for the downfall of the junket operator industry.
Macau also implemented new and tougher regulations also made an impact. One of the harder regulations is that Macau is cracking down on loan sharking operations.
Further checks and bounds are also in the works. All of this makes it easy for the junket operators to consider moving base to a country like the Philippines or Cambodia.
Here, the mass market is still well behind the VIP gamblers and the junkets can earn well if they bring some in. Thanks to the difference in operating costs, even a small amount of VIP customers can produce a profit in these new markets. It can be expected that the migration of junket operators from Macau will continue in 2020 as well.
- Coronavirus Pandemic is Forcing Osaka to Move its RFPs Deadline - March 31, 2020
- Week in Casino News: The Strain on Sports Betting and Operators looking for Extra Cash - March 29, 2020
- Housebound UK Citizens produce a Direct Benefit to Online Casinos - March 29, 2020
- Boyd Gaming is cutting down its Dividend payments because of the Coronavirus Pandemic - March 28, 2020
- West Virginia Racing Commission allows Greyhounds to Exercise, but not Race - March 28, 2020