Pereira Coutinho
Dore Entertainment is reportedly planning to close the two VIP rooms it operates in Wynn Macau. On the sidelines of yesterday’s Legislative Assembly plenary session, lawmaker Pereira Coutinho, who has been involved in a campaign to support the affected investors, commented on the case.
“This was an expected situation, sooner or later the rooms would have to close because they simply did not have money to pay,” Coutinho said.
Although there is nstill no official confirmation as yet, the lawmaker said that he believes the closure will be done on Dore’s initiative. “They only kept the rooms in operation due to an imposition of the concessionary”.
Mr Coutinho added: “The losses are very high, everybody is seriously concerned about this” wondering why until now there was no action from the Gaming Inspection and Coordination Bureau regarding the matter. Besides the VIP rooms in Wynn Macau, Dore operates one room in MGM and another in The Venetian Macao.
Separately, Daiwa Securities Group Inc. has said that the announcement of stricter accounting rules for junket operators, which start next year, “is incrementally negative to the [VIP gaming] sector.”
The brokerage firm added that increased scrutiny presents an additional complication for operators “at a time of continued business challenges for the segment as a whole.”
Earlier this month, the Gaming and Inspection Coordination Bureau introduced new guidelines to improve transparency in the junket sector. Starting next year, all junket operators will have to compile monthly accounting reports and register details on key financial personnel.
Following the announcement, Daiwa analysts Jaime Soo, Adrian Chan and Jennifer Wu reported that they “do not rule out the possibility of a potential renewed and accelerating junket attrition in the coming months.”
“The possibility of this outcome may result in a further decline in the junkets’ overall liquidity, which implies a potential further leg down to VIP volumes in 2016.”
The announcement of stricter accounting rules follows the case of fraud involving Dore Entertainment, that was revealed in September and agitated the local VIP gaming segment.
Gross Gaming Revenue (GGR) in VIP gaming fell 38 percent year-on-year during the third quarter of 2015, according to government data. VIP revenue accounted for 53.32 percent of casino GGR in the third quarter of 2015, down from 55.51 percent in the previous quarter and from 56.45 percent at the same time last year.
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