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Part 4 : Factors that will shape Macau ’ s future ICE365 Macau report
The role of junkets in Macau ’ s future
The facilitators cater to the high rollers ’ every whim , though their influence is now beginning to wane
Having gone through a process of legitimisation , junkets , and the VIPs they bring to Macau , were hit hard by Xi Jingping ’ s antigraft campaign that started in 2014 . This impacted Macau ’ s revenue , which has ultimately contributed to mass market gaming overtaking VIP as the main source of income .
At their core , the junket operators provide travel services , banking and perks to high-value gamblers , helping bring them to Macau to gamble . Working in partnership with casinos , with dedicated areas for gamblers and accommodation , the player is required to make a deposit with the junket operator , and play a pre-agreed minimum sum during their trip .
Junkets have been subject to regulation and tax liabilities since 2001 . Legislation passed in 2004 then permitted casinos to provide credit to the operators , strengthening their ties with the industry .
However , the anticorruption crackdown stunted growth , and while VIP remains a significant part of Macau ’ s revenue , mass market play – especially the mass market high rollers , or premium mass – now dominates .
This has reshaped the junket market , with numbers declining from 235 in 2013 to 85 in 2021 , according to the DICJ . This is largely down to consolidation , where the small to medium operators have banded together , or been acquired by larger corporations .
The businesses have also branched out into the broader tourism industry .
“ In the past 15 years they have become well run , welloiled machines , listed on the Hong Kong Stock Exchange , running completely legitimate , clean operations ,” says Chris Wieners from Hogo Digital . “ SunCity , for example , has branched out very successfully into tourism and hospitality . It went from providing services to VIPs , such as private jets , then to travel services such as buses , and then started opening restaurants . Where all the junket businesses are pushing for is to run their own integrated resort .”
These properties are likely to be on a smaller scale , supported by hotel and resort projects , often leveraging significant databases of Chinese VIPs to do so .
From the operator side , it certainly feels as if their role is diminishing . Wynn Resorts chief executive Matt Maddox suggested operators could “ just slot junkets in ” alongside mass market offerings where they offered value .
“ But we really think that Macau is transforming much more into a tourist destination focused on more than just gaming ,” he added . “ And so our focus is on the non-gaming side , it ’ s on the premium mass side . I really don ’ t anticipate the VIP market snapping back like it did after 2016 . I think it will definitely be there . It ’ ll definitely be a large market .”
ICE365 Macau report June 2021