Macau's junket operators prowl Asia to expand VIP business

Tue Nov 26, 2013 4:16pm EST
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By Farah Master

MACAU (Reuters) - On the second floor of Solaire's plush ocean-front casino in Manila, the dealers speak Mandarin, the players are Chinese and revenue from high-roller gamblers is rising rapidly.

"It's almost not in the Philippines. It's more like you're in Macau," says Francis Hernando, the Philippine gaming body's vice president for licensed casino development.

Wealthy Chinese gamblers are a growing presence in Asia's emerging casino hubs as Macau's junket operators use their home base as a springboard to grow their high-roller business across the region.

"The junkets are very aware and are looking all over Asia to expand. It's the biggest expansion phase ever right now," said Ben Lee, Asian gaming consultant at Macau-based consultancy IGamiX.

Offshore expansion is just one way the junket operators - which earn commissions from casinos to attract "big whale" gamblers - are responding to pressures at home as Beijing strives to turn Macau into a mass-market tourist destination.

Caps on the supply of gaming tables that Macau's casinos can install and new rules that make it harder for wealthy punters to remain anonymous are two of the regulatory changes prompting the junkets to alter their business model.

As a result, the proportion of Macau's gaming revenue from VIPs has fallen to its lowest share since 2006, while spending by middle-class, mass-market gamblers - who do not rely on Macau's idiosyncratic junket system - is surging.

Armed with extensive customer networks and deep pockets thanks to monthly turnover of up to $9 billion, the junkets are now trying to repeat the Macau formula in countries such as Cambodia, the Philippines and Vietnam.   Continued...

Tourists stand outside the Wynn Casino in Macau May 17, 2011. REUTERS/Tyrone Siu