LVS Becomes Latest Concessionaire to Forego Junkets in Macau

LVS Becomes Latest Concessionaire to Forego Junkets in Macau

Macau has undergone some significant changes in the way it issues licenses to casinos, part of a broader review that was intended to bring the Special Administrative Region (SAR) under the further control of Beijing. The move also gave operating casinos in the SAR a very strong incentive to sit up and listen.

As a result, several companies have severed all ties with junket operators, following a crackdown on the industry by authorities in China and Macau. The latest to cut all ties with three junket operators is Las Vegas Sands, the parent company of Sands China and a Macau gaming concessionaire.

Separate the Gaming Wheat from the Chaff

In doing so, Sands is effectively steering its business clear out of any potential regulatory reefs.  Las Vegas Sands announced the decision to cut the cord with some of the region’s junket operators in its Annual Report for 2021.

The company named Macau as one of its key markets along with Singapore and Nevada. Part of this decision was motivated not so much by a fear of an immediate crackdown but rather because of the uncertainty that reigns over the sector. The report read:

“While we strive for excellence in our associations with gaming promoters, we cannot assure you the gaming promoters with whom we are associated will meet the high standards we insist upon.”

LVS

The Gaming Inspection and Coordination Bureau will most likely have to take a very hard look at what junket operators may operate in Macau and in what capacity. Meanwhile, China has sent a clear sign that junkets are not on its good side, following the arrest of Alvin Chau, Sun City Gaming Promotion Company limited chief executive.

Challenges in Overseeing Junket’s Business

Chau has been charged with various criminal offenses, including illegal gambling and money laundering. As a result, an estimated 50% of the junket market for which Suncity is accountable, went under. As if that wasn’t enough but then Levo Chain, Tak Chun Group’s chief executive and head of the second-largest junket operator in Macau, was also arrested.

As those events unfolded, the regulator published a list of 46 VIP gaming promoters for 2022, significantly trimming the fat from 85 promoters a year before. Meanwhile, LVS also cited a court case involving Wynn Macau Ltd and its junket operator, Dore Entertainment Co Ltd dating back to 2015 when a Dore employee stole $770,000 from a customer and a recent court decision finding both Wynn and the promoter jointly liable for covering the gambler’s missing money.

This, LVS argued, was another thing to take into consideration as the company may not have the ability to fully monitor the internal day-to-day operations of junket partners.