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Macau junket operators at risk from new laws and Covid-19 impact

Macau junket operators continue to face struggles amid the Covid-19 pandemic.
Macau junket operators continue to face struggles amid the Covid-19 pandemic.

Macau’s junket operators have been deeply affected by travel restrictions and now China’s restrictions against cross-border gambling services. Analysts believe several could fold.

Macau.- Despite Macau’s casino operators slowly beginning to show some encouraging results, VIP gaming promoters or junkets are at risk, analysts say,

On March 1 China’s National People’s Congress approved an amendment to the country’s criminal law so that anyone who “organises” overseas gambling for mainland Chinese will be deemed to have committed a criminal act.

Although the law wasn’t designed specifically to stop junket operators working with Macau’s casinos, the absence of clarity is causing junket operators to avoid taking a risks.

Covid-19 travel restrictions also continue to impact on the junket sector in Macau due to the absence of VIP clients.

Macau’s Gaming Inspection and Coordination Bureau (DICJ) has reported that there are now 85 junkets authorised to operate in the Special Administrative Region (SAR).

Kwok Chi Chung, president of a junket trade body, the Macau Association of Gaming and Entertainment Promoters, said: “I will not be surprised if there are only a couple of major junket firms left standing in the market in the future.”

Kwok Chi Chung predicted that Macau’s VIP gaming sector won’t return to pre-Covid 19 levels of business due to constraints on money flow out of the mainland, as well as the country’s latest criminal code changes.

Mass gaming: A possible solution

Despite this difficult outlook, veteran junket investor Luiz Lam thinks Macau’s junkets have a unique role in the city’s gaming scene.

According to Luiz Lam, some junket operators have also started to run their business in a “mass gaming style”.

Some junket operators are offering discounts on food and drink at casinos or transport arrangements to be “highly customised” for their gaming patrons and compete with casino operators.

Kwok Chi Chung added: “The client source for the VIP gaming sector will thin out someday. So expanding the business into a different dimension is the right thing to do.”

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Covid-19 Macau casinos