Macau casinos seek to replace junket revenues amid crackdown, industry uncertainty

December 23, 2021 Emerging Markets

Casinos in Macau, the world’s biggest gaming hub, now face uncertainty amid COVID-19 restrictions and an ongoing Chinese government crackdown on the profitable junket business. The enclave, which heavily relied on this market -by arranging transportation, accommodation and credit to gamble for VIP clients-, now looks to everyday gamblers for relief in the short term.

With most junket gaming rooms now closed and travel restrictions preventing mass-market customers to arrive, casinos in the former Portuguese colony are seeing their financial outlooks called into question, including operators such as Wynn Macau, Sands China and MGM China, according to an analytical article from Reuters this week.

VIP gaming rooms, which made up about a third of Macau’s gaming revenues in 2019, have taken a big hit following the arrest last month of Alvin Chau, head of Macau’s biggest junket operator, Suncity. Since the arrest, shares of Wynn Macau have plunged about 23%, Sands China has fallen about 13% and MGM China dropped 20%.