Melco Resorts and Entertainment Ltd’s Macau subsidiary stated in its third-quarter report that it could face increased risks from “interpretation and enforce” laws relating to gaming. Melco Resorts Finance Ltd is concerned that changes occurring in Macau’s gaming industry could cause issues for the entire market.
Macau Gaming in Flux
Melco Resorts Finance Ltd stated that, on September 30, total liabilities for the firm were $4.81 billion. This is a marginal decrease from the $4.88 billion recorded at 2020’s end. Melco Resorts, the developer, owner, operator and owner of casino complexes that bear the Melco brand, is a holder of a Macau subconcession license. It is responsible for properties such as City of Dreams Macau.
Melco Resorts Finance’s third-quarter filing was lodged in the US on Monday. It referred to specifically the recent and final Macau court case, “the Dore Case,” which involved Wynn Macau Ltd, another Macau casino operator. Wynn Macau Ltd is jointly liable for VIP junket deposit made at its junket room.
According to industry insiders, it is still unclear what the impact of that judgment could be on other cases involving Dore’s junkets.
Melco Resorts Finance’s filing referred to another major event. Alvin Chau was arrested in Macau on Saturday. He is the boss of Suncity Group’s brand of junkets. Ten other people were also detained by Macau authorities and described as “senior administrator” members of a “criminal organization.”
He is currently being held at a Macau pre-trial detention center, suspected of offenses such as facilitating online gambling via Macau and the Philippines for Chinese customers.
On Tuesday, it was announced that Suncity’s Macau VIP rooms would be closing at midnight on Wednesday, December 1.
Uncertain Future for Operators
Melco Resorts Finance stated, in its Monday filing, that Melco Resorts Finance referred first to the Dore matter, “In November 2021, the Court of Final Appeal in Macau issued a final, unappealable decision that a gaming operator is jointly liable with a gaming promoter for the refund of funds deposited with such gaming promoter at a casino.”
Melco Resorts Finance highlighted the subsequent arrest of executives of a gaming promoter who were accused of illegal offshore gaming activities by Macau authorities.
During Melco Resorts’ third-quarter conference call, Lawrence Ho Yau Lung, chairman and chief executive, stated that Macau’s VIP segment was “structurally impaired” in comments he made to analysts.
This comment was made in the context of a question about China’s ongoing focus on reducing consumer extravagance in its ‘common prosperity’ policy. He added that Macau gaming will “be more mass-oriented in the future,” and that mass would require more amenities and other non-gaming attractions.
Melco Resorts Finance announced that it has reduced its net loss to $139.9 million, down from $203.4 million a year prior.