Macau’s VIP Gambling Market Now Virtually Closed As More Junket Operators Leave
Summary
- Junket operators continue to leave Macau as illegal gambling crackdown intensifies
- VIP gambling could soon be wiped out in Macau, according to Suncity Group
- Suncity Group implementing cost-cutting measures to stay afloat
Macau’s VIP gambling market continues to shrink as multiple junket operators terminate their operations in the region, the latest of which was Macau Golden Group, which had been in the business for several years.
The company, in an internal memo released on Wednesday, announced that it’s ceasing all of its VIP gaming services in Macau. The group offered VIP gaming across many local casinos, such as Casa Real Hotel, Hotel Lisboa, and Grand Lisboa, under its long-term partnership with SJM Holdings Ltd.
Given these latest developments, Macau has lost its reputation as the top VIP gaming destination in Asia. Suncity Group Holdings, the biggest casino junket operator in the city, stated that Macau can no longer rely on VIP gaming as a major source of gross gaming revenue as companies and businesses are now pulling out and turning their attention elsewhere.
Suncity Impacted by Closure Of Junket Market in Macau
Suncity Group was recently embroiled in controversy after its former chairman Alvin Chau Cheok Wa was arrested and detained in Macau in November 2021 over his alleged involvement in cross-border gambling and money laundering.
Following his arrest, Chau stepped down as chairman of Suncity Group Holdings. His detention also resulted in a massive $4.8 billion sell-off in Macau casino stocks. A number of casinos also suspended their partnerships with Suncity owing to the controversy.
With Macau’s junket market now virtually closed, Suncity Group is now eyeing investments in other Asian jurisdictions beyond mainland China. The company said it’s now exploring other opportunities, such as investing in integrated casino resorts that will cater to the huge demand among the wealthy and middle-class customers in Singapore, South Korea, Malaysia, the Philippines, and Thailand, among others.
Suncity Forced to Implement Cost-Cutting
In its annual results which were filed on Wednesday, Suncity also stated that it’s carefully navigating the gaming sector in Asia given the limited funds at its disposal. The company suffered an annual loss of $30 million, and its main priority for now is to preserve cash to stay afloat.
As a result, it implemented its most relentless cost-cutting measure, selling off non-core businesses that were underperforming, including an aircraft and some properties in mainland China. It’s also considering letting go of non-core assets in Japan.
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