Gaming | Junket customers to ‘resurrect’ in different segments: LVS

The customers in the junket business will resurrect in different segments and find new ways of materializing in the casino, said Rob Goldstein, chairman and CEO of Las Vegas Sands.

Speaking in an earnings call with analysts, the executive said that the business will just evolve to a different segmentation, adding the customers are here to stay.

“And it always is that way in any business. It goes back to any segment doesn’t necessarily just go away because the mechanism goes away,” he said. 

“So we’re pretty bullish that a business that was yielding 8%, 10% could be much more positively profitable as a resurrection of the segment,” Goldstein added.

According to reports, junkets account for 75% of Macau’s VIP gaming revenue, equating to around USD3 billion each year. 

Recent data from the Gaming Inspection and Coordination Bureau shows that the number of gambling promoter licenses in the city has decreased nearly 50% in just one year in the aftermath of the arrest of Suncity Group CEO and junket mogul, Alvin Chau.

Currently Macau has only 46 junket licensees for the current year: far fewer than the approved 85 license gaming promoters last year.

Following the release of the data, the bureau issued another statement noting that 29 other junket operators will be dealt with in accordance with the law after the parties have all the necessary documents.

Echoing similar sentiments as Goldstein, Grant Chum, senior vice president of Global Gaming Strategy, remarked that “some portion of it also dissipate and disappear […] but that’s probably the portion [of customers] that was not in the first place, that’s sustainable in any event.”

Chum opined that the core underlying demand will find its way into other segments over time.

Speaking on the company’s opportunities in both the premium and mass customer segments amid Macau’s market recovery, Goldstein disclosed that customer demand and spending in Macau have proven resilient at the premium mass level from both a gaming and retail perspective.

The parent company of Sands China expresses “great optimism” about the company’s ability to perform at pre-pandemic levels once visitation returns. 

“As the market recovers, both the Four Seasons and Londoner will provide growth opportunities. […] We look forward to participating in the tendering process as it proceeds to fruition,” he added. 

Investment for new license bidding

Gaming operators in the city are slated to prepare for the new license bidding as the current concession expiry will be on June 26, a deadline which officials have said will “likely be extended.”

For Las Vegas Sands, there is no concrete dollar amount or specific approach in mind at this time. However, “We continue to be very bullish on the [Macau] market despite the last 24 difficult months. We like what we’re seeing, the retendering process,” said Goldstein.

According to the gaming law amendment draft, the number of new casino operators allowed to operate in Macau will remain at six concessionaries. However, the operating period will be halved to 10 years, compared to the current 20 years.

Sands China Ltd reports net loss of USD245 million in Q4 2021

Total net revenues for Sands China Ltd. decreased 4.3%, compared to the fourth quarter (Q4) of 2020, to USD643 million for the Q4 of 2021. Net loss for the gaming operator was USD245 million for the Q4 of last year, compared to USD246 million in the same period in 2020.

Full year 2021 total net revenues for SCL increased 70.4%, compared to the full year 2020, to USD2.87 billion. Net loss for the gaming operator was USD1.05 billion in 2021, compared to US$1.52 billion in 2020. For the full year 2021, the firm’s adjusted property EBITDA was USD338 million, compared to an adjusted property EBITDA loss of USD431 million for the full year 2020.

Robert G. Goldstein, chairman and CEO of Las Vegas Sands, said, “We remain confident in the eventual recovery in travel and tourism spending across our markets and enthusiastic about the opportunity to welcome more guests back to our properties in 2022 and the years ahead.”