The number of licensed junkets in Macau has experienced a drastic halving, plummeting to half of its previous level (36) and now standing at only 18, according to the latest update from the SAR’s gaming regulator.
Macau’s junket sector has witnessed a 92 percent decline over the past decade, as Macau’s casinos reached their peak in 2014, with gaming revenue exceeding $45 billion, three times that of Las Vegas. At that time, 235 junket operators had registered to operate under licenses in Macau, collectively contributing around 60 percent of the casino revenues.
In September of last year, the gaming regulator set a cap of 50 junkets for 2024.
According to information available on the Gaming Inspection and Coordination Bureau (DICJ)’s website, only nine collaborators have registered so far in Macau. Meanwhile, the regulator sets a cap of 250 collaborators in the whole market. Based on the definition, gaming collaborators are actually people with many contacts and a network of partners who can bring players to the VIP rooms of Macau casinos.
According to current gaming law, each Macau junket is permitted to partner with a single gaming concessionaire. Junket operators can earn a commission, capped at 1.25 percent of rolling chip turnover, for their gaming promotion services but are prohibited from sharing casino revenue with the casino concessionaire they work with.
Each junket licensee is also required to provide a guarantee of MOP1.5 million ($186,000), with the highest junket commission rate being capped at 1.25 percent of the total net rolling amount. The minimum corporate capital required is MOP10 million ($1.24 million).
The suppression of the VIP segment in Macau does not appear over, although junket-operated VIP rooms no longer exist in Macau. In mid-December, the Macau SAR government proposed to completely bar junket operators from loaning money for gaming purposes and further control junket activities in the gaming hub.
The recent move revealed that authorities have proposed significant amendments to the draft bill, suggesting that only licensed companies would be able to engage in providing credit to gamblers, while gaming intermediaries would be barred from this activity.
Under existing regulations, both gaming concessionaires and junket operators are authorized to issue credit to players, but if the bill is approved, only licensed companies would be allowed to lend gaming chips to gamblers.
Macau’s casino gross gaming revenue (GGR) reached MOP183.05 billion ($22.68 billion) in 2023, indicating a 333.8 percent surge compared to the previous year.
According to estimates from investment banks, Macau’s mass market GGR has already fully recovered to 2019 levels. Meanwhile, the pace of VIP recovery has remained steady at 23-24 percent, mirroring the performance in 3Q23.
