The casino’s VIP sector is “surprisingly strong due to the return of the junket agents” under a new arrangement to lure high-rollers to the gaming tables.
According to Ben Lee, managing partner at IGamiX, in July, the VIP ratio clawed back up to 30% of pre-Covid 2019 levels, as cited in a report issued by Nikkei Asia.
Gross revenue generated from VIP gamblers surged 41.9% in the second quarter, amounting to MOP12.16 billion.
As the influx of visitors returns, revenues are on the rise in the VIP sector, showing unexpected growth following the city’s crackdown on the previously thriving junket industry.
One of the most significant crackdowns came with the swift downfall of Suncity Group back in January 2022, which once handled as much as HKD180 billion staked by high rollers in its VIP rooms in a single month, which underscores China’s severe crackdown in the world’s largest gaming hub.
In the city’s biggest gaming law overhaul, junket agents will only be able to grant credit to gamblers to play in the local casinos if such promoters have a formal contract with the concessionaire allowing such an activity.
Junkets have historically provided a service that is part-upscale travel agent and part-money changer for big spenders in Macau.
The deposits of these companies serve as a guarantee that they comply with their legal obligations and will pay any fines that may be incurred because of their activities.
Back in December 2021, Chief Executive Ho Iat Seng admitted that the existence of junket operators was a “problem” for Macau.
Under the new law, each junket licensee is required to provide a guarantee of MOP1.5 million, while the highest junket commission rate is capped at 1.25% of the total rolling amount.
The junket agents are just “keeping their relationships with the players warm in Macau until such time as they all can leave for other countries,” Lee said.
An anonymous analyst has said that Beijing’s crackdown and higher taxes make Macau only a temporary location for agents to maintain customer relationships because they have “nowhere else to go,” as cited in the report.
Data from the China Tourism Academy shows that Macau is the top destination, with 50.9% of Chinese outbound tourists in the first half of the year.