Macau Junkets not expected to fully recover from Covid downturn

Macau Junkets not expected to fully recover from Covid downturn

On an earnings conference call last Thursday, Wynn Resorts Chief Executive Officer Matt Maddox made clear his firm’s view that the golden age of Macau junkets has definitively passed, and it is not likely to return as the Covid-19 pandemic subsides.

“Our top line market share will likely not get quite back to 2019,” Maddox stated on the call, “just because the junket business will unlikely get back to where it was in 2019.”

At another point in the call, he elaborated: “As far as the junkets, again, lots of conversation about junkets. That business is not dead as some people like to say. We saw it getting back to 25 percent to 30 percent of its previous levels. I believe it will continue to consolidate with some of the largest operators, and we will continue to participate in it. So I don’t anticipate that junket business will be back to 2019 levels, because it is consolidating and it is shrinking.”

The decline of junkets, of course, predated the economic crisis of 2020. Indeed, the Macau government reported about a month ago that it had collected approximately MOP299 million (US$37.5 million) in taxes on commissions paid by casinos to junkets, a figure which was down a steep 24.1 percent compared to the previous year.

According to the Gaming Inspection and Coordination Bureau (DICJ), the total number of licensed junkets in Macau fell from 100 in January 2019 to only 95 in January 2020.

The pandemic seems to have only accelerated this decline, as has tighter regulation from China and other jurisdictions. Junkets have also taken a public relations battering in the recent New South Wales hearings and in other recent cases.

While Maddox may be correct to say that the Macau junket industry is “not dead” at this time, it does appear to be crippled, and the prognosis for recovery is not good.


Related Articles

Macau operators make CSR push amidst coronavirus crisis

As the Covid-19 crisis descended upon, first, China, then the world, the six Macau operators have not been idle in their CSR efforts, in spite of the mandated casino closures and reopenings under difficult economic conditions.

Wynn CEO Maddox, two other execs to take temporary pay cut

Wynn Resorts CEO Matt Maddox and three other senior executives have agreed to take a 20 percent cut to their base pay for the first three months of the year. From April 1st, normal pay will be restored.

Wynn Resorts eyes layoffs due to union hour rules

Wynn Resorts Ltd says it may be forced to layoff workers because the Culinary and Bartenders unions are requiring the company to return to union rules of scheduling a 40-hour week for employees. 

Wynn Resorts to continue various service agreements with Wynn Macau

Wynn Macau has extended framework agreements with three wholly-owned subsidiaries of its parent firm, Wynn Resorts, that will allow it to receive a range of services from these companies.

Wynn CEO sees “Roaring 20s”-style come back

Wynn Resorts CEO Matt Maddox has said the casino industry in Las Vegas could come back like in the Roaring 20's as people seek to have fun after surviving the pandemic, but warns that may take two years to happen.
vip gaming macau

Macau VIP sector losing further ground

There have been some positive reports this week, talking about optimism over Macau’s medium-term future, led by the premium mass and mass markets.

Wynn Resorts promotes digitization of Macau SMEs

Wynn Resorts hosted the 2020 Wynn Local SME Procurement Partnership Meeting and E-Commerce Forum this week in Macau, aiming to serve as a starting point for the digital transformation and upgrade of local small-and-medium-sized enterprises.
Hong Kong Stock Exchange

Operator stocks fall as Covid clusters reemerge

After the vaccine-induced stock euphoria earlier this month, Covid-19 has returned to dampen investor enthusiasm.
Wynn Casino

Premium mass seen as Macau’s short-term growth driver

Macau operators focused on the premium mass market are likely to significantly outperform in the short term, while the VIP sector may take another two years to recover, according to Bernstein Research.
Ho Iat Seng

Macau gaming law revision not likely until late 2021

Consolidation of the bases and advancement in adversity was the thrust of Macau Chief Executive’s policy address for 2021, though it gave little away when it came to the current pillar of the economy - the gaming industry.