GGRAsia: Macau Junket Rooms May Stop Operations, Lay Off Workers

In a bid to weather what has been an unending crisis, Macau’s junket operators could resort to shuttering their gaming rooms and laying off employees en masse.

Macau’s Junket Operators Face Layoffs and VIP Gaming Rooms Suspensions

Macau’s entire business model was first disrupted when COVID-19 hit back in February, forcing a two-week closure. With global air traffic suspended and the border with China slammed shut, the special administrative region has had a very little source of revenue to rely on, weighing down gaming operators, which are the main contributor to Macau’s GDP.

And this is beginning to weigh operators and the local government down. According to GGRAsia, Macau’s gaming operators are now planning to suspend junket VIP gaming rooms and lay off workers, as tourism is nowhere near returning back to normal. July’s outlook is just as grim, as new COVID-19 cases around the world continue to mount.

U Io Hung, a vice president for the Asian Responsible Gaming Alliance and local junket operator owner, said that many operators have already started shutting down part of their businesses. The lack of tourists has affected both big and small establishments.

Macau’s appointed Chief Executive, Ho Iat Seng, acknowledged previously during the week the new challenges the region was facing. Gaming revenue has fallen by 90% for a third consecutive month, leaving a huge dent in the region’s ability to finance itself.

While the government has insisted from operators retain employees and not lay them off, this may no longer be sustainable. Speaking to GGRAsia, Mr U explained that while Mr Ho was in his right to request gaming operators to show solidarity, layoffs were bound to happen.

Remedy to the Situation: Individual Visas

Calling for solidarity is even more difficult when junket operators have no reassurances from the government when Macau would return back to normal with patrons trickling in from across the border with China in the very least.

In outlining possible remedies, Mr U said that an old solution known as Individual Visa System (IVS) should be reinstated, allowing individuals to travel to Macau. The system won’t be ideal, as it would be subject to a lot of paperwork, scrutiny and much frustration for patrons, but it would nevertheless guarantee some minor revenue.

Even before the crisis struck, Macau’s junket numbers had been falling. As of 2020, the licensed operators in Macau were 95, but their numbers are now bound to disappear in the COVID-19 conflagration that has seized the world.

To retain employees, junket operators need reassurances, but nobody is willing to proffer those.