\nMacau casinos faced new woes yesterday as it was revealed that one of the city’s top-five junket operators would close most of its VIP gaming rooms for big-spending mainlanders.<\/p>\n
\tAnalysts at Daiwa Capital Markets said David Group would close four of its five gaming rooms, including those at the Wynn and the MGM. Junket operators are a key part of Macau’s gaming ecology, organising trips for and extending credit to mainland high rollers in return for commission from casinos.<\/p>\n
\tThe gambling hub is facing intense pressure as President Xi Jinping’s anti-corruption drive puts the squeeze on the VIP market and Beijing presses the city to diversify its economy.<\/p>\n
\t"Over the past six months, junket consolidation has only been occurring among the smaller junket operators. David Group’s closure will be among the largest junket closures in Macau in the past year to date," the analysts wrote in a research note.<\/p>\n
\tClients must put up HK$100,000 to open an account at the group’s VIP rooms, a Nomura Securities report said.<\/p>\n
\tDavid Group did not respond to a request for comment.<\/p>\n
\t"If junkets were to scale down or exit, this would not come as a surprise to us, because we think the profitability for junkets has been declining because of increased competition for a smaller market size," said Aaron Fischer, regional head of gaming research at brokerage CLSA. He had seen no concrete evidence of the closures, however.<\/p>\n
\tCLSA is forecasting a 13 per cent decline in the VIP market for the world’s biggest gambling hub this year, with a 9 per cent decline in overall gaming revenue.<\/p>\n
\tThat followed a 2.6 per cent fall in revenue last year to 351.5 billion patacas, according to the city’s Gaming and Coordination Bureau. The drop, the first fall for a decade, was widely linked to Xi’s attempts to stamp out graft and capital flight, along with a slowing mainland economy. Gaming revenue for last month was down a record 30.4 per cent on November to 23.3 million patacas, the lowest level of the year.<\/p>\n
\tShares in Hong Kong-listed Macau casino operators fell by between 32 and 51 per cent last year, compared to a 2 per cent fall in the benchmark Hang Seng Index. Melco Crown, operator of Macau’s City of Dreams casino resort, last week announced plans to delist from the Hong Kong bourse, though it denied its decision was linked to the plummeting gaming revenues.<\/p>\n
\tThe former Portuguese enclave marked the 15th anniversary of its handover last month. During a visit for the occasion, Xi stressed the need to diversify the economy to make the city a global tourism centre.<\/p>\n
\tXi urged the Macau government to find "greater wisdom and courage" to "strengthen and improve regulation and supervision over the gaming industry."<\/p>\n
\tThe calls were accompanied by a series of measures intended to stem illicit currency flows through the city, including restricting the use of UnionPay debit cards. Mainland law enforcers have long seen Macau as a key conduit for the evasion of the nation’s capital controls, an issue in the spotlight amid the so-called "fox hunt" for corrupt officials who have fled abroad.<\/p>\n
\tDaiwa analysts said they believed Hong Kong-listed junket operator Neptune Guangdong Group was also consolidating operations. The firm did not respond to requests for comment.<\/p>\n
\tThe industry was shaken again on Saturday with the arrest of more than 100 people in a vice crackdown at a casino hotel. They included Alan Ho, nephew of gaming industry kingpin Stanley Ho Hung-sun.<\/p>\n
No replies were posted for this topic.<\/p>\n","protected":false},"excerpt":{"rendered":"
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