Las Vegas Sands Says Macau Junket Shutdown Opens Up New Growth Opportunities
Summary
- Las Vegas Sands says it can now redeploy gaming space previously occupied by junkets
- Junket operators started leaving Macau following the demise of Suncity Group
- LVS CEO praises Macau’s gaming concession tender process
The shutdown of Macau’s junket business offers a fresh opportunity for growth for casino operators, including Las Vegas Sands Corp which owns multiple properties in the region through its subsidiary Sands China Ltd.
Las Vegas Sands CEO Robert Goldstein said that significant gaming space left vacant by junkets can now be redeployed for other services. Goldstein made the comments during the company’s conference call this week which was held following the release of its official Q2 results.
Las Vegas Sands’ casino resorts in Macau saw their revenues drop by 56.3 during the second quarter of 2022 to just US$374 million. The massive decline is mainly attributed to the ongoing COVID-19 restrictions throughout the city.
During the conference call, Goldstein said they always knew that the junket business is a “margin-challenged” business. The downfall of the junket industry has had a major impact on casino gross gaming revenue (GGR), but the silver lining in all this is that operators now regain full control of the space formerly assigned to VIP gaming.
Goldstein said they can now use the space to boost their offerings and improve their services, especially in the base premium, premium mass, and direct premium segments, paving the way for more casino growth.
Macau’s junket industry began to shrink significantly following the arrest of Alvin Chau Cheok-wa, the head of the now-defunct Suncity Group, the biggest casino junket operator in Macau. He was arrested by Macau police in November 2021 on allegations of cross-border gambling. Just two months later, another junket boss, Levo Chan Weng Lin, was held by authorities after being accused of heading a triad.
All of these led to several junkets pulling out from casinos across the city which, according to investment analysts, resulted in a massive decline in GGR.
Tender Process Moving Smoothly
During the conference call, Goldstein also commended Macau’s handling of the gaming concession tender process, saying its “moving very well” and that the government was able to address the major concerns of operators.
In June, lawmakers gave the green light to an amendment bill that will see up to six new concessions being allowed for a maximum term of 10 years, with the possibility of a three-year extension. Goldstein believes all operators are so far satisfied with how things are playing out.
Carolyn DuttonAuthor
Carolyn is our legislation expert, with a background in law she is able to cover the current state of gambling around the world
