Macau ops maybe liable for US$6.4bln in junket debt

Macau casino operators could collectively be responsible for as much as HKD50 billion (US$6.37 billion) of an estimated HKD100-billion of “unfulfilled liability” and “uncollected debt” left behind after the Suncity Group and Tak Chun junket brands were “abruptly shut down”, says a Thursday note from Credit Suisse (Hong Kong) Ltd.

“While casinos may not immediately make such provisions until the claim arises, this is a material tail risk investors should consider,” said the bank.

Macau’s VIP gambling trade has seen a decline in business in recent years, coupled with tightened supervision from authorities in Macau and mainland China. The trend accelerated with the November detention of Alvin Chau Cheok Wa, on suspicion of promoting cross-border gambling overseas to mainland China customers, and the cessation of business at his junket brand Suncity Group.

In January this year, the VIP trade saw the arrest of Levo Chan Weng Lin, boss of junket brand Tak Chun, on suspicion of being a triad leader.

Credit Suisse said the two junket brands accounted for about “72 percent VIP market share” in Macau. After the high-profile arrests, the operations of both Suncity Group and Tak Chun were suspended, “and many other junkets followed suit,” added the bank.

Source: https://www.ggrasia.com/macau-ops-maybe-liable-for-us6-4bln-in-junket-debt-cs/