Wynn Macau and Melco to Stop Junket VIP Rooms this Month
By December 21, 2021, the Wynn Macau and Melco Resorts will stop operation within junket VIP rooms.
Within the next two weeks, junket VIP services at certain properties in Macau will be no more. Melco Resorts & Entertainment along with Wynn Macau have announced they will shut down these services due to recent incidents within the industry.
Unknown sources have told media outlets that Wynn will stop offering the luxury high-roller spaces by the 20th and Melco will stop the next day. The junkets have been affected as of late due to major issues arising in the industry, one being the arrest of Alvin Chau in November.
Cracking Down on Junket Operations
Junkets are feeling the strain and are quickly losing steam in Macau. Chau is the Suncity chairman and CEO who was arrested last month, connected to the biggest junket operator in the world. Prosecutors put out an arrest warrant for Chau from Wenzhou in mainland China and he was obtained soon after.
The arrest is part of a much larger crackdown regarding cross-border gambling and those who work to bring players to take part in high roller gaming. Beijing is not happy with funds going to other areas instead of mainland China, and officials are doing all they can to stop it.
Prosecutors have accused Chau of running a network of junket agents that offered services to gamblers in China. It is said that 12,000 agents cater to around 80,000 wealthy individuals on the mainland. Authorities in Macau are also in on the charges, stating a separate case is in the works against Chau based on offshore iGaming targeting people in China.
The arrest comes at a time when the highest court in Macau ruled that casino operators are now liable for junket debt. The goal of the ruling is to stop the casino and junket relationships so that players will not be enticed to visit areas near mainland China to gamble.
When Chau was arrested, it was a big blow for the junket industry. It also serves as a warning for operators as to how they should act. Six licensed operators in Macau will lose their concessions next year and this will be the first re-licensing that Macau has seen since the 2000s began.
Getting Stricter on Casino Operators
Back in September, the gaming regulator of Macau decided to announce that the gaming industry will see major regulatory changes in the future. Casinos will face stricter oversight to ensure player protections and that operators are following all regulations and protocols.
When this announcement was made, stocks in Macau dropped considerably. Investors see the move as a way for Beijing to make Macau autonomous. They want more control regarding the outflow of capital, and this will pressurize the foreign exchange rate.
If junkets are able to survive the changes coming next year, they may eventually shut down for good by 2024 when the city goes to digital yuan instead of focusing on cash. It seems highly unlikely that junkets will make it through next year due to the casinos wanting no issues with government officials in the future.
It will be interesting to see what changes are coming for Macau in the future. Details as to what type of overhaul is coming for the industry have not been revealed. Will the decisions lead to a further drop on the stock market and perhaps even more issues for casino operators?
Will those functioning currently in Macau be able to continue if licensing is reconsidered? Only time will tell and we will stay tuned to all the latest updates.