Sands China could benefit from withdrawal of junket operations

Las Vegas Sands’ CEO has said that the withdrawal of junket operations in Macau could be an opportunity for Sands China to grow its margins in the casino business.

Macau.- Las Vegas Sands CEO Robert Goldstein has suggested that the withdrawal of junket operations in Macau could be an opportunity for the company’s subsidiary Sands China to increase profit margins in its casino operations. While sharing financial results for the second quarter, he noted that the company could now divert VIP gaming space to other needs.

Goldstein stated: “The junket business – we always knew it – is a margin-challenged business. I feel grateful we have all this new space coming back to us that we can redeploy. I think it adds all kinds of premium opportunities for base mass, premium mass and direct premium as well. To me, it’s a very valuable transition to a higher focus margin business”.

In December, several casino operators, including Las Vegas Sands, ended agreements with their primary VIP gaming promoters. The sector has been in crisis after the arrests of Alvin Chau and Levo Chan Weng Lin, the heads of Suncity Group Holdings and Tak Chun Group, two of the city’s largest junket groups.

The number of junket operators has been falling each year from 235 in 2013 to a reported 46 junket licences.

Praises to the gaming concession tender process

Goldstein also referred to the bidding process for Macau’s casino concessions and praised the way the Macau government has handled it. Earlier this month, authorities published the framework for the retender of the city’s gaming licences including the criteria and procedures for the process. 

The new gaming legislation allows up to six gaming concessions – equal to the current number – with a length of 10 years. Casino operators must have a registered capital of at least MOP5bn while their licences are valid. The concessionaire and anyone holding more than 5 per cent of the operator’s shares must not own, directly or indirectly, the capital of another concessionaire.