Casino operator raised its junket commission from 40% to 42.5% in a move that has surprised analysts.
Macau.- Wynn Macau has raised its junket commission for the first time in 14 years increasing its share from 40% to 42.5%.
The move surprised analysts such as Credit Suisse’s Kenneth Fong, Lok Kan Chan and Rebecca Law who said. “We are very surprised by such a move, especially with such minimal demand now.”
However, they pointed to Wynn’s declining junket rolling share, which fell from 23% in 1Q19 to 20% in 4Q19 and which could fall as much as 16% in February.
“As volume shrinks, junkets will naturally allocate business to operators offering higher commission,” Credit Suisse said in a note.
“Wynn’s actions highlight the industry’s difficulty (low revenue and cost pressure as they cannot fire staff) and the cautious outlook,” the note added.
The analysts noted that VIP rolling is down around 80% year-on-year since Macau’s casinos re-opened on 20 February, with mass down by 90%.