Decline of Macau’s junket operations

Lea Hogg January 31, 2024

SiGMA news

Decline of Macau’s junket operations

In the heart of Macau, a seismic shift has been taking place within the gaming industry. The city, once a bustling hub for junket operators who were instrumental in driving the casino revenues, is now on the precipice of a new era. These operators, who once flourished in the city’s vibrant casino scene, are now grappling with an uncertain future.

Bygone days

Rewind to 2014, and the landscape was markedly different. Macau was a thriving metropolis for junket operators, with a staggering 235 registered entities operating within the city. Their influence was undeniable, contributing to approximately 60 percent of the city’s casino revenues. Their role was pivotal, acting as the lifeblood of Macao’s gaming industry.

However, the winds of change have swept through the city, leaving the future of these once-thriving junket operators hanging in the balance. As the city navigates through these significant changes, the gaming industry in Macao is poised for a transformation, the scale and impact of which remains to be seen. The once-lucrative junket operator sector, which played such a crucial role in shaping the city’s casino revenues, now faces an uncertain and potentially challenging future.

Shift in Macau’s gaming landscape

These operators, also known as gaming promoters, offered extravagant travel incentives to high-roller customers, enticing them to play at specific casinos. These gambling trips, known as “junkets,” were a significant part of the city’s gaming landscape. However, the number of junket operators has drastically reduced to just 18 this year, according to data from the Gaming Inspection and Coordination Bureau. This decline is a result of increased regulatory scrutiny and changes in the city’s gaming laws.

U Io Hung, (Pictured above), the president of the Macau Professional Association of Gaming Promoters, expressed his concerns to Asia Gaming Brief. He believes that the cap on junket licenses will deter VIP players from the Special Administrative Region (SAR), leading them to less regulated casinos in Southeast Asia. He also noted that some Macao-based junket operators have already relocated their businesses to Southeast Asia. Recent amendments to Macao’s gaming law have further tightened the noose around junket operators. They can now only partner with a single gaming concessionaire, and their commission is capped at 1.25 percent of rolling chip turnover, with five percent of it being paid as tax to the government. Furthermore, they are prohibited from sharing casino revenue.

These new policies align with the SAR’s efforts to rebrand itself as a non-gaming tourism destination and business hub. However, the junket sector has been plagued with scandals in recent years. Notably, “junket king” Alvin Chau was sentenced to 18 years in January 2023 for financial wrongdoing, and former Macao junket operator Ji Xiaobo was declared a criminal mastermind by a Chinese court. The decline of Macao’s junket operators signifies a shift in the gaming landscape.

As the sun sets on the era of junkets, the future of Macao’s gaming industry hangs in the balance.

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