SJM Holdings and Galaxy will continue working with junket operators in Macau.
SJM Holdings and Galaxy Entertainment Group have revealed that they will maintain their cooperation agreements with junket operators at least until the end of the current contracts.
Macau's Junket operators received the news with some relief. Amid speculation that it could be the end of the sector, two Macau casino operators stated that they will continue to work with Junket operators, at least for now.
The Hong Kong newspaper, Ming Pao, reported that Ambrose So, CEO and vice-chairman of SJM, confirmed that the casino operator will maintain the VIP lounge business operated by junkets, at least for the duration of the existing contracts. However, it remains to be seen whether the company will continue working with junkets once the cooperation agreements are renewed.
Angela Leong On Kei, co-chairman and CEO of SJM Holdings, said during an interview with the city's public broadcaster TDM: "We have not made any agreement with the VIP junket lounges to end the collaboration."
Meanwhile, Galaxy Entertainment Group said it also intends to continue with current cooperation agreements, despite the recent news.
Last Thursday (9) Tak Chun, the second largest junket operator in Macau, confirmed that some casinos suspended partnerships. This happened after Suncity Group Holdings decided to close all its VIP rooms in Macau until further notice, following the arrest of Alvin Chau Cheok Wa on charges of cross-border gambling and money laundering.
Tak Chun said that his affected employees will receive higher compensation than that contemplated by the Labor Relations Act, including an additional month's base salary, seniority compensation, retirement funds – for employees who have served for three years – and non-applicable paid annual leave.
Credit Suisse also revealed that Wynn Macau plans to close all of its VIP lounges starting December 20th. Other operators are reviewing their positions but have not yet made any decisions.
Gaming operators will terminate agreements with junkets, analysts say.
Morgan Stanley analysts believe more gaming concessionaires will terminate their contracts with junkets, effectively shutting down the sector in the city, even if authorities haven't formally ordered a ban. All junket licenses in the city expire on December 31st. However, according to Morgan Stanley, if gaming operators cut ties with junkets, the industry could shut down without official government orders.
The number of launch licenses issued by the Gaming Inspection and Coordination Office (DICJ) has been decreasing each year, from 235 in 2013 to 85 in 2021.
In 2019, Suncity accounted for more than 45% of the junket market, while Tak Chun accounted for approximately 19%. VIP revenue that year was approximately US$14 billion. ( FocusGN )
