Wynn Macau to Break Off Marriage with Junkets

Earlier this year, Wynn Resorts announced that it was likely going to put some distance between its Wynn Macau arm and junket operators. Following the drama surrounding Suncity Group over the past month, the casino operator is ready to fulfill that statement.

Junket Ops Dying in Macau

Linda Chen, the vice-chairman and chief operating officer of Wynn Macau, has confirmed to local media that the company will end all agreements with junket operators before the end of the year. According to Macao Daily News, she stated that the end of cooperation with VIP gaming promoters was conducive to Macau’s long-term and healthy growth.

Chen stated that third-party managed VIP areas would be transformed into mass-market venues, or used for other purposes.

Since former Suncity CEO Alvin Chau was detained in Macau and the junket operator was shut down, Macau’s casino sector has been the focus of attention. After the December 1 closure of all Suncity Group VIP Rooms in Macau, it was reported that some of the city’s casino concessionaires had decided to stop collaborating with other junket companies.

Not a Surprising Move from Wynn

Chen’s comments were the first public confirmation by one of Macau’s casino operators that it would end its collaboration with junket companies. The move by the company isn’t surprising, either. In addition to the fallout from the Suncity ordeal, Wynn is caught up in a case that has left it holding the bag for a junket operator’s bad decisions.

Melco Resorts and Entertainment Ltd., Sands China Ltd., and Galaxy Entertainment Group Ltd. have been reported to have announced that they would also close their junket rooms by the end of December. None of these firms has publicly stated their intent to end cooperation with junkets.

SJM Holdings Ltd. recently said that the company had “contractual relationships” with junkets and that it would evaluate the situation when the relationships expired.

Analysts with Morgan Stanley stated earlier this month that the closing of junket rooms could “effectively mean the end to junket VIP in Macau.” The segment has declined in performance over the past eight years, with 2020 delivering bigger losses. Additional pressure from mainland China on Macau to police its gambling industry has also led to the junkets falling out of favor.

It’s possible that junket operators could shift their businesses to other Asian regions. However, the overall attitude toward the companies, many of which have skirted anti-money-laundering controls, is going to greatly restrict their activity.