Five years ago changes to the junket operations around Macau restricted the number of licensed, legitimate operators. New information shows the numbers are still reducing each year, but analysts feel the market will stabilize in 2018.
The Gaming Inspection and Coordination Bureau or DICJ released new figures in the second to last week of January 2018. It shows the licensed junkets went from 109 to 99 companies. There are also ten individuals working in the area. It is a decline of 13.5 percent from 2017.
Further analysis shows 141 junkets on the approved list for 2016, was down from over 200 in 2013. It is a 57% reduction since the bid to change junket operations in Macau.
Part of the reason for the fewer operators relates to the financial strings. Tighter regulations are making it more difficult for whales to get to Macau. Smaller junket operators stopped operations after the 2016 two-year revenue decline continued. A few joined larger operators, effectively giving up their business in an acquisition situation.
Analysts believe 2018 will bring changes because the VIP gaming sector is finally stabilizing.
Promoters for the casino industry are discussing the upcoming changes. Kwok Chi Chung, who runs Association of Gaming Entertainment Promoters said there would be no more “big” modifications to the junket sector. The implication that a few may come into the picture and others may leave, but there will not be substantial percentage reductions in the last five years.
The consolidation of junket operators is becoming more stable, which also reduces the effect of fewer operators running VIPs around Macau.
Andrew Lo Kai Bong, CIO, for Sun City Group also feels the same. He is part of the junket operator group seeing the changes in large-scale operators, and that new startup company is not going to risk opening their boats to gamblers.
The government of Macau is amending the casino laws again to ensure junket oversight, as a way to provide legal operators are retaining a fair and honest business. They are also looked into shareholder structure. The last aim is to examine the capital requirements and potentially increase the minimum, which would cost junket operators more to keep in business.
Despite the proposed changes, there is still hope the junket sector will stabilize. Macau has continued to be one of the top gambling locations despite financial hits and oversaturation in the market. Other areas opening casinos have also reduced business, which has cost junket operators in the area.