Macao casino operators count cost of junket crackdown

March 4, 2022 Macau Earnings & Filings

After weeks of silence about the abrupt disappearance of the junket agents who had been top sources of clientele for years, Macao casino operators are finally acknowledging the impact on their business.

Half the city’s six operators recorded year-on-year declines in revenue in the October to December quarter due to the drop-off in VIP betting, according to financial updates. Two have had to set aside tens of millions of dollars to cover expected losses from the collapse of junkets. Others have warned that the authorities could punish them for agents’ past misdeeds.

This accounting comes as the heads of Macao’s two largest junket operators, Suncity Group’s Alvin Chau and Tak Chun Group’s Levo Chan, sit in pretrial detention in the city, each charged with unlawful gambling operations, money laundering and leading a criminal group.

Beginning in the 1970s, junket agents recruited high rollers for Macao’s casinos, handling their travel and financial arrangements in exchange for commissions and a share of the take. While this allowed such whales to bet on credit, settling wins and losses with mainland Chinese gamblers required working stealthily around Beijing’s tight foreign exchange controls.

Macao prosecutors have yet to detail their cases against Chau and Chan, nor have the men made any public comment, but Chinese state media have linked them to networks of thousands of mainland agents who allegedly used illegal methods to channel funds overseas.