Macau’s Gaming and Inspection Bureau (DICJ) has announced the arrival of two new junket operators to the world’s gaming capital.
Xin Wei Lda and Pok Lok Promoção de Jogos Lda are now licensed to serve VIP gamblers visiting city casinos. That brings the total to 31, up from 29 last year, but well below the industry cap of 50.
Junkets serve as middlemen for high-rolling casino patrons, primarily from mainland China. In the past, they arranged lines of credit and payouts, enabling VIPs to sidestep currency controls, which limited daily overseas money transfers to just 20,000 renminbi ($3,200).
At their peak in 2014, 235 junkets ruled the Macau casino industry, contributing as much as 70% of gross gaming revenue.
Sector marked by scandal
The junket model started to unravel under scrutiny from Chinese President Xi Jinping, who rose to power in 2013. Under his administration, the central government launched a vigorous anti-corruption crusade. Among its targets: illicit capital flight from the mainland, including funds spirited out by VIP gamblers.
The first domino fell in 2014, when Macau junket operator Huang Shan fled the jurisdiction, leaving HK$10 billion ($1.3 billion) in unpaid debt. That same year, a Chinese court identified Hengsheng Group operator Ji Xiaobo as a criminal kingpin.
He reportedly set up illegal casinos outside China, used violence to collect gambling debts and laundered the money. In 2015, a cage cashier absconded with HK$700 million from Dore Entertainment, a junket that operated VIP rooms at Wynn Macau.
The decisive blow came with the arrests and convictions of two high-profile junket bosses. In 2023, a Chinese court found Suncity “junket king” Alvin Chau guilty of illegal gambling and organised crime.
By bilking casinos out of HK$823.7 billion in undeclared bets, he robbed the local government of HK$8.26 billion in tax revenue. Chau was sentenced to 18 years in prison.
Tak Chun junket leader Levo Chan got 14 years for similar crimes. He facilitated under-the-table bets that defrauded casinos of HK$35 billion and the government of approximately HK$8.6 billion.
Macau junkets: Down but not out
By 2024, only 18 junkets were active in Macau, prompting headlines about its extinction. Reports of its death were at least somewhat exaggerated, but the rules of governance have changed considerably.
Under Macau’s 2023 gaming law, junkets may no longer issue credit or manage VIP rooms. They are limited to doing business with just one of Macau’s six casino concessionaires, although concessionaires may contract with more than one junket. Instead of sharing casino revenues, junkets earn a fixed 1.25% commission on rolling-chip turnover.
Although 31 legal junkets are now on the books, as few as 20 may be operational. Even so, the local government expects to collect MOP150 million ($18.6 million) in taxes this year on commissions remitted by casinos to junkets. That would be up 50% from the MOP100 million the city expects to record for the 2025 fiscal year.
Marjorie Preston
Marjorie began her gaming career in 2007 and has focused on Asian gaming markets since 2020. Outside of work, she writes about travel and film and plays the drums.
Original article: https://igamingbusiness.com/casino/macau-adds-two-new-junkets-still-fewer-than-industry-cap/
