Gaming revenue in Macau plunged 21% in January from a year earlier. Casinos in the Chinese enclave were hit both by the ongoing Covid-19 impact in tourism, and a crackdown from mainland China on the junket market, including the recent arrest of the two largest junket operators’ bosses.
According to figures posted by the Gaming Inspection and Coordination Bureau, gross gaming revenue in the world’s largest gaming hub was 6.3 billion patacas ($784.7 million), reports Bloomberg.
While notably down from a year earlier, the results were still better than what was expected by analysts: the median estimate was a 31% year-on-year decline. Revenue also fell 20% from the previous month, and was also down 75% from pre-pandemic levels in 2019.
Although the industry faced during January the impact of tightened border restrictions amid a recent Covid-19 outbreak in neighboring Zhuhai, experts also credit the plunge on a crackdown on the VIP industry. Beijing has tightened control over junket operators, which offer easy credit for mainland Chinese high rollers, collecting on their debts using underground financing channels.
Levo Chan Weng Lin
Over the weekend, Macau police arrested casino junket boss Levo Chan Weng Lin, chairman and controlling shareholder of Tak Chun Group and co-chairman and CEO of Macau Legend Development. Analysts described Tak Chun Group as second only to Suncity Group in market share for pre-pandemic years in the city.
The arrest comes about two months after the arrest of Alvin Chau, head of Suncity, the largest junket operator in the market. Police said the new arrest is linked to the Suncity case, as the two groups worked together, engaging in “illicit and criminal activities.”
Beijing credits the junket market with helping transfer billions of dollars overseas, which is highly problematic for a country that has always had strict controls on capital outflows. In 2020, the government described the outflows as a “national security risk.” Mainland China is now pushing for market diversification in Macau.
According to analysts cited by Bloomberg, VIP revenue is expected to fall 43% this year, while overall gaming revenue is estimated to grow about 59% year on year. February could remain lackluster, based on weak advance hotel occupancy rates. Moreover, China is tightening border restrictions to prevent Covid outbreaks prior to the Beijing Winter Olympics.
But February could also prove to be a weak month for gaming considering the Lunar New Year holidays. While traditionally a peak travel season for Chinese tourists, restrictions could mean venues in Macau will miss out on a key source of revenue.
The new revenue figures come as Macau officials debate proposed amendments to the enclave’s gaming law. The Legislative Assembly passed its first reading of the draft bill earlier this month, which is now set to be sent to the Standing Committee, where closed-door discussions are to be held starting this month.
Officials are set to keep the number of licenses at the current number of six, while introducing stricter control over the industry. This includes reviewing casino operations every three years, introducing a minimum revenue requirement, and new controls over the junket market, including a ban on dedicated VIP rooms in casinos.
Original article: https://www.yogonet.com/international/news/2022/02/01/61190-macau-gaming-revenue-down-21–in-january-amid-junket-crackdown–covid-restrictions
