Gaming MGM seeks to convert junket players to direct players amid sector’s turmoil
MGM China is set to focus on targeting the mass market, saying “it is where the future resides,” as the city’s junket sector faces a crackdown.
Speaking on an earnings call with analysts, Hubert Wang, MGM China’s president and chief operating officer, said recovery was in play for MGM in 2021, driven by the mass market segment.
Following upheavals in the junket industry, with arrests of junket moguls occurring in a matter of just two months, MGM is now focused on capturing and converting former junket players into direct players.
The executive feels that the marketplace is still quite dynamic insofar as the conversion of former junket players to in-house players and, to some extent, to premium mass players, is concerned.
“I think that all junket operators in the traditional sense have basically ceased operations in Macau. So the players or the agents working for the previous junket operators are trying to find a place to settle down,” said Wang.
Currently, MGM’s goal is to “capture as much conversion from junket to in-house to mass as possible. And on that note, I think that we are also looking at reallocating resources, particularly the table units to support the mass growth eventually,” Wang added.
Previously, in an exclusive interview with the Times, Wang expressed confidence that the fate of Suncity would not have a dramatic financial impact on the firm, reiterating its focus on the mass premium market.
Macau’s USD3 billion VIP sector was dealt a huge blow by the shutdown of junket operators, which serviced high-rollers. The arrests of junket moguls Alvin Chau and Levo Chan led to the termination of agreements by gaming operators with them amid the upcoming gaming concession renewals.
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MGM China is satisfied with the business’s Chinese New Year performance, particularly on the mass market side. The gaming operator reached 85% of pre-pandemic levels in terms of mass volume measured by table drop.
However, China’s zero-Covid policy is a strong factor at play given it is the location of the vast majority of its potential customers.
Strict travel restrictions in China are heavily affecting the SAR, with Wang noting that “now in China, it’s getting more and more precise.”
“They can really do precise travel restrictions targeted to certain areas. But the impact into Macau is that these areas’ travelers won’t be allowed to come to Macau or they have to go through quarantine,” said Wang.
The executive recalled that, in the past year, various restrictions were imposed in each quarter, and he has not ruled out the imposition of travel restrictions again in 2022.
Therefore, in terms of broad recovery, the group is set to consider travel policies and restrictions, and when these are likely to be lifted.
“But I’m pretty confident that 2022 will be a better year than 2021, driven again by mass [market], particularly the high end of the mass [market],” concluded the executive.
