Junket operators are a thing of the past in China and Macau. As MGM China would confirm, cutting the middleman out of business is not a bad thing. With junket operators out of the way, transitioning former junket customers now represents a unique opportunity for the growth of operators.
MGM China Keen to Pursue Strong Recovery in Months to Come
On Thursday, MGM China, the leading developer, owner, and operator of gaming and hospitality resorts in the Greater China region released its annual 2021 financial results. Regardless of the ongoing pandemic and its economic impact, the company noted that it saw a “gradual recovery” last year.
“We understand what our customers want and MGM China is well-positioned for the market’s eventual rebound.”Kenneth Feng, president and strategic CFO at MGM China
In a statement, MGM China’s president and strategic CFO, Kenneth Feng, said that the company remains “cautiously optimistic towards a market recovery.” He explained that MGM China expects to see “not just repeat customers, but new faces especially in the premium mass segment.” Additionally, Feng outlined that the company is well-positioned for the market’s possible rebound.
Converting Former Junkets to Help the Company’s Recovery
In a report released by Inside Asian Gaming, the company’s president and chief operating officer, Hubert Wang explained how MGM China plans to boost its recovery. He outlined that capturing and converting junkets to in-house mass as soon as possible is “where the future lies.”
“It’s still quite dynamic in the marketplace, this conversion of former junket players to in-house players and to premium mass players as well.”Hubert Wang, president and chief operating officer at MGM China
Wang added that the company is also planning to relocate resources. According to him, table games will undergo changes “to support the mass flow initially, so we are going to reallocate more tables from VIP to mass in the coming quarters.”
Operators No Longer Rely on Junkets
Junket operators in Macau used to make a living by persuading high-value customers into visiting different gaming operators. The activity brought significant earnings for operators, which is why many of the gaming companies in the region used the method.
It all went well for both junkets and gaming operators until November last year. Alvin Chau, the CEO of the biggest Macau junket operator, Suncity Group Holdings, was arrested over alleged links to cross-border gambling. This event likely started the fallout of all junkets in the region.
As a result of the crackdown on gambling in Macau and China, operators such as Wynn Macau and Melco Resorts severed ties with junkets last December. Since then, Las Vegas Sands has also taken the step to forego junkets in Macau earlier this month.