The landscape of licensed junkets in Macau has undergone a substantial transformation, with the number slashed to just 18, marking a 50% reduction from the 36 licenses issued the previous year. This shift is attributed to recent regulatory changes, including restrictions on revenue-sharing arrangements and a prohibition on operating VIP rooms within Macau’s casinos. The reforms are reshaping the industry, influencing the dynamics between junkets, concessionaires, and casino management companies.
Drastic Reduction in Licensed Junkets:
The Gaming Inspection and Coordination Bureau (DICJ) reports a significant reduction in licensed junkets, now totaling 18, compared to the 36 licenses issued in the previous year. This drastic reduction aligns with recent changes to Macau’s junket law, reflecting a regulatory push to streamline the sector.
Prominent Licensed Junkets in 2024:
Notable licensed junkets in 2024 include Haishen Group, Hoi Seng, Chong Fat (Macau) Limited, and Pacific Intermediário Sociedade Unipessoal Lda. However, some companies, such as Novo Clube VIP Legend, are notably absent from the list, signaling a changing landscape in the industry.
Regulatory Changes Impacting Junkets:
The decline in licensed junkets follows recent regulatory changes, including a prohibition on revenue-sharing arrangements with concessionaires. Instead, junkets are limited to a maximum commission of 1.25% on rolling chip turnover. Additional restrictions include the prohibition of operating VIP rooms within Macau’s casinos.
Stricter Licensing Requirements:
Licensing requirements for junkets, agents, and casino management companies have become more stringent. To secure a license, they must provide guarantees ranging from MOP$500,000 to MOP$1.5 million, and gaming intermediary companies must have a registered capital of at least MOP$10 million.
Industry Response to Regulatory Shifts:
U Io Hung, Director of licensed junket Pacific Intermediário Sociedade Unipessoal Lda, notes that the 18 licensed junkets for 2024 have fully complied with the new junket law. He anticipates more companies entering the industry in the coming years as some are still applying for licenses or awaiting approval from the DICJ.
Business Environment Challenges:
Despite improvements in the business environment since the reopening of Macau’s borders, challenges persist for junkets. Increased legal restrictions, an inability to compete with concessionaire VIP rooms, and resource disparities have contributed to market exits by some gaming junkets.
Impact of New Gaming Credit Law:
U Io Hung highlights the potential impact of a new gaming credit law under scrutiny by the Legislative Assembly. If passed, the law could further restrict junkets by prohibiting them from engaging in money lending practices, narrowing their operational scope.
Industry Decline in Recent Years:
The number of gaming junkets in Macau has witnessed a steady decline from 235 in 2013 to around 100 in 2019, 85 in 2021, 46 in 2022, and 36 in 2023. Accelerated by the arrests of key industry figures, this decline reflects broader shifts in the sector.
Macau’s licensed junket landscape is undergoing profound changes, influenced by regulatory reforms and industry dynamics. The reduction in licensed junkets, stringent regulatory requirements, and evolving business environments are reshaping the sector. Industry players must navigate these challenges, adapt to new regulations, and explore innovative strategies to thrive in the transformed landscape of Macau’s gaming industry.