Junkets to Survive Without Chinese Gamblers, Asserts Expert

Davis Fong, a gaming professor and former lawmaker in Macau, believes that junket operators in the city can survive and thrive. All they need to do is redirect their attention away from mainland Chinese customers to Hong Kong and Southeast Asia, IAG reports as it cites Fong and his outlook for the industry in the region.

Macau’s Junkets in the Hot Seat

Fong is a professor in Integrated Resort and Tourism Management and the Director of the Institute for the Study of Commercial Gaming at the University of Macau. While speaking to the media during the Macau government’s Responsible Gambling Promotions for 2021 at the Macau Science Centre, he said that it was up to the junket industry how to respond to China’s recent crackdown on cross-border gaming.

The junket industry is in a state of uncertainty following the closure of VIP rooms by Suncity Group in Macau. It was also forced to close its business earlier in the month after former CEO Alvin Chau was arrested on charges related to illegal gambling.

Fong stated that “With these changes, our gaming services will depend on exportation, which means [sourcing] clients from different regions. Traditionally some casinos and VIP rooms have targeted clients from mainland China to promote their business, but this is inconsistent with the legal system.”

Fong doesn’t believe that Macau is in the process of revamping its gaming structure. He explained that targeting VIP gambling segments in countries other than China, including Japan, Taiwan, Thailand, and more, was common before Portugal handed Macau over to China in 1999.

“So, I think in the future, according to the change of rules, VIP rooms must make a suitable adjustment. We should not forget Southeast Asian clients just because we focused more on mainland China after the handover,” he added.

Hong Kong a Strong Target

Fong believes that Macau should be looking to Hong Kong for the short-term, as COVID-19 keeps China’s borders and its two special administrative regions (SAR) closed off to the outside world.

He said that Hong Kong clients were always a key source of client revenue. “Hong Kong clients have always been an important client source. Before the handover, seven million people came to Macau from Hong Kong each year but with our marketing more focused on mainland China that has dropped to five million. Now we have a chance to use our old marketing, so when the border [with Hong Kong] opens [on 19 December], we move forward step by step, absorbing more Hong Kong clients.”

Fong spoke more broadly about the future of Macau’s gaming industry in 2022. He said that there is a direct correlation between visitation and gross gaming numbers. He says that GGR will grow as visitor numbers increase.

Fong spoke more generally about the outlook for Macau’s gaming industry in 2022. He said that there is a direct correlation between visitor numbers and gross gaming revenue, with the latter driven by the tourist numbers. However, some analysts now believe that the numbers will be less than previously anticipated.