Macau’s junket market continues to shrink. Over the past year, the number of licensed junkets has decreased by 8.3%, marking the sixth year in a row that there has been a decline in the legal gaming promoters. There are now only 100, compared to 109 seen in January of last year.
The Gaming and Inspection and Coordination Bureau (DICJ, for its Portuguese acronym) released its updated list of junkets yesterday in Macau’s Official Gazette, a report it produces annually in January. Looking back over the past several years, the current number is less than half that seen in 2013, when 235 junkets were operating under license.
The DICJ didn’t offer a reason for the decline; however, it could be due to continued losses the junkets have seen over the past several years. The gambling industry in Macau suffered a two-year recession that hurt the junkets’ bottom line, and they reportedly have yet to be able to fully recover. Many turned to the government last year, asking for tax breaks and assistance in collecting outstanding gambling debts.
Macau is now actively working to better define the junket market. A bill was introduced earlier this month that, while still undergoing revisions, would raise the capital deposit for new licensed junkets to $1.23 million. The government is also set to introduce new “severe penalties” on unregulated capital deposits made by operators in the junket sector.
The chief executive of Macau, Fernando Chui Sai On, said last November that the administration would provide more supervision of junket operations, as well as conduct audits on all junket activities.
Junkets have always been an important part of the VIP gaming segment in Macau. They recruit high rollers from abroad, determining how much those gamblers are worth and how much they can spend. They offer credit to the players in an effort to overcome strict currency regulations between mainland China and Macau, as well as collect on losses, provide accommodations and help secure a range of amenities for the gamers.
The VIP gaming segment is a vital channel of revenue for Macau. Last year, it made up 54.8% of the entire casino gross growth gambling revenue for the city, and the junkets have helped to keep the market moving forward.