Category Archives: Macau

Macau junkets seek higher capital reserves for new operators


macau-junket-operator-capital-reserveMacau casino junket operators should be required to maintain significantly higher capital reserves to keep pace with the resurgent VIP gambling market and ensure investor confidence, according to a local junket rep.

On Sunday, Macau broadcaster TDM featured an interview with Kwok Chi Chung, the head of Macau’s Association of Gaming and Entertainment Promoters, which represents junket interests in the world’s top casino gambling hub.

The current capital deposit threshold for Macau-registered junkets is a mere MOP 100k (US $12,500). In April 2016, Macau’s Gaming Inspection and Coordination Bureau proposed boosting this sum to MOP 10m ($1.25m). On Sunday, Kwok went even further, suggesting the reserve fund should be raised to MOP 50m ($6.2m) to ensure new junkets are capable of withstanding the occasionally wild variance of Macau’s VIP gambling market.

The following day, Kwok told GGRAsia that the increased capital requirements were needed to keep pace with the “multibillions” of patacas that many Macau junkets were turning over on a monthly basis. Kwok said the roughly 120 registered junkets that survived Macau’s recent downturn “would not be affected” by the change.

More importantly, the requirement to maintain a larger capital reserve could discourage some sketchier would-be junkets from throwing their hat into the ring. Macau’s junket industry suffered a crisis of investor confidence a few years back when a host of operators folded due to a lack of liquidity and numerous internal theft scandals.

Kwok said his group had also urged the DICJ to require licensing for junket “collaborators,” i.e. associates who help rope in new VIP gamblers and arrange both credit and payments of gambling debts.

JUNKET SCAMMER ARRESTED
A boosted capital requirement wouldn’t have prevented three mainland Chinese men from being scammed by a couple of con artists posting as junket operators. On Tuesday, the Macau Daily Times reported that local police had arrested a man named Song who, along with an accomplice, conned the mainlanders out of HKD 200k ($25,600).

Earlier this spring, Song reportedly told the mainlanders that he was a junket promoter and could provide free food and lodging at a Cotai hotel. Once the men had checked in, Song took them to dinner, then took their money and said he and his partner would be back with casino chips. Only they never returned.

The mainlanders reported Song to the local police, and Song was busted last week while trying to re-enter Macau. Song copped to his guilt in the scam but claimed his share of the stolen funds amounted to only HKD 10k, while his accomplice, who remains at large, kept the rest.

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Tech firm buy prompts executive reshuffle at Iao Kun


A reshuffle of executives at Iao Kun Group Holding Co Ltd. (IKGH) is under way as the Macau casino junket investor completes the acquisition of a Chinese technology company.

Tech firm buy prompts executive reshuffle at Iao KunLam Man Pou stepped down from his position as chairman and director of IKGH’s board of directors on Wednesday, but will remain and chief marketing officer of IKGH, effective immediately. Vong Hon Kun also resigned from his CEO and board director position, but will stay on with the company as its chief operating officer.

The changes to the management and the company board came following IKGH’s announcement that it has finalized the acquisition of 51 percent of software technology development company Jia-Heng Industrial Ltd, which is the holding company of Guangzhou LiNiu Network Technology Co. Ltd.

LiNiu Network is a software technology development company that is currently developing an electronic business-to-consumer trading platform focused on the Chinese agricultural industry, according to IKGH.

IKGH chief operating officer Lam Chou In has been promoted to take the position of co-CEO at the junket investor group. He will share the chief executive position with LiNiu Network founder Wang Shun Yang. Wang, who was also appointed a director of the board, will be responsible for Iao Kun’s technology industry development while Lam will focus on the group’s Macau gaming business

The group also named Fong Weng Nam as the new chairman of the board of directors. Iao Kun described Fong as an entrepreneur with more than 20 years of experience in investment, real estate development and Macau’s gaming business.

Acquiring LiNiu Network is part of Iao Kun’s plans to diversify its non-gaming assets as the group attempts to staunch the financial bleeding as a result of bad VIP debts. Shifting its strategy from the junket to technological industry may provide additional support to the company that has been crippled by financial tailspin.

The company has already shut down four of its promoted VIP rooms in Macau, leaving behind a single VIP room at City of Dreams Macau. The junket group assured that it will not completely exit the junket sector, although it has “no further plans to expand” its gaming operations to additional VIP rooms.

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Reforms to fuel Macau’s 2017 GGR: DICJ


Macau’s gross gaming income (GGR) will go on to keep track of an upward trajectory in 2017 on the back of mass-market gamblers and the government’s tighter polices on dangerous bettors, Macau’s casino regulator reported.

Reforms to fuel Macau’s 2017 GGR: DICJPaulo Chan, director of the Gaming Inspection and Coordination Bureau (DICJ), painted a rosy image for Macau as he credited the stricter polices that the authorities executed relating to junket operators, dollars laundering and cellphone betting this 12 months.

But Chan was careful in providing an estimate on Macau’s 2017 GGR, which he pegged at MOP200 billion ($twenty five billion). The estimate was the same amount of money that the casino regulator projected for 2016 and thirteen percent below the estimates of five analysts surveyed by Bloomberg.

Chan reported he has taken into account the slowing Chinese financial system, a depreciating yuan and the uncertainties of a new U.S. presidential administration in providing his GGR forecast.

“Gaming income is envisioned to see stable improvement next 12 months, and hopefully go upward,” Chan explained to Bloomberg in an interview at his office. “Macau has started to see nutritious and sustainable development.”

The former Portuguese enclave watched its GGR nosedive for the past two a long time as a result of China’s corruption crackdown. To stanch the economical bleeding, casino operators shifted its functions from VIP segments to attracting more people and informal gamblers.

Macau shortly posted beneficial gross gaming revenues for 4 consecutive months, 12 months-on-12 months, with the opening of two new resorts, Wynn Palace and Sands’ Parisian.

“After gaming income slumped for more than 20 months, the field has acquired the worth of nutritious improvement,” Chan reported. “We will go on to prescribe in the recent direction. It doesn’t appear required for a heavier dose of medicine.”

Global credit score credit card debt watchers S&P World-wide rankings and Fitch Rankings Inc. each predicted a extended recovery for Macau immediately after finally hitting rock bottom.

Alex Bumazhny, Senior Director, U.S. Corporates of Fitch Rankings, reported that Macau’s financial system is steadily recovering from its slump, albeit at a slower tempo. The company sees Macau’s gaming revenues to slide four per cent in 2016 ahead of rebounding to mid-solitary-digit development in 2017.

Sophie Lyn, a credit score analyst of S&P, predicts that the mass-market section will account for about 50 per cent of whole gaming income in 2017, up from forty seven per cent in the initial nine months in 2016.

Even though China’s ongoing anti-corruption marketing campaign continues to be a opportunity risk for the casino field, Lin pointed out that Macau was shifting from VIP pushed to mass-market pushed development which is fewer delicate to polices.

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Macau Q3 GDP leapfrogs to favourable territory


Macau economic system snaps a two-12 months financial contraction, many thanks to the resurgence of gaming income in the former Portuguese enclave.

Macau Q3 GDP leapfrogs to positive territoryModern details from the city’s Studies and Census Assistance confirmed that Macau’s gross domestic solution (GDP) in the July to September 2016 period of time accelerated by four percent, the very first favourable quarterly expansion recorded about the previous two years. The very last time Macau chalked a favourable GDP was in the second quarter of 2014 when the when the city’s economic system expanded by 5.seven percent.

DSEC have attributed the rise to a rebound in both exports of providers and financial investment. Gaming providers in Macau are integrated in exports when calculating the city’s GDP.

“External need confirmed improvement, main to a pickup in exports of gaming providers and exports of other tourism providers, mounting by .two percent and 6.5 percent respectively 12 months-on-12 months,” mentioned DSEC in yesterday’s assertion.

Facts launched by Macau casino regulator Gaming Inspection and Coordination Bureau (DICJ) very last week unveiled that VIP baccarat gross gaming income in the a few months ending September 30 manufactured up fifty two percent of all the GGR produced by casino game titles.

DICJ claimed that Macau’s mass-sector segment casino GGR, which features slot devices and stay multi match digital tables, has expanded by 3.nine percent 12 months-on-12 months in the 3rd quarter of the 12 months. Even so, Union Gaming pointed out that when the operators’ claimed quantities for the period of time are taken into account, mass sector gambling has, in simple fact, expanded by eleven percent 12 months-on-12 months.

Meanwhile, Private use expenditure and financial investment picked up by two.3 percent while domestic need bounced again to the favourable territory with .3 percent.

At the identical time, financial investment acquired momentum all through the 3rd quarter, underpinned by an increase in non-public financial investment. Gross fastened cash development, the gauge of financial investment, grew by two.3 percent 12 months-on-12 months, rebounding from a sharp drop of twenty percent in the preceding quarter.

Federal government financial investment rose by 1.8 percent, of which equipment financial investment grew by 17.5 percent but general public development declined by .1 percent.

In serious conditions, Macau authorities explained that its economic system contracted by 5.4 percent in the very first nine months of 2016.

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Las Vegas Sands’ Parisian Macao completes interconnected indoor “behemoth”


November three, 2016

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sands-parisian-macaoOn line casino operator Las Vegas Sands thinks its new Parisian Macao home has produced a “behemoth” elaborate that is unparalleled in the gaming market.

Sands unveiled its Q3 earnings report on Thursday, reporting profits soaring two.6% to $two.97b, while working cash flow fell two.6% to $719.6m and web cash flow dipped two.one% to $605.5m. The shortfalls had been blamed on pre-start expenditures of its newest Macau vacation resort, the Parisian Macao, which opened in mid-September.

Sands China profits rose three.6% to $one.72b while web cash flow fell five.five% to $324.3m. Sands described its overall mass market place profits soaring 6% in Q3, while the premium mass section grew fifteen%.

VIP gaming turnover ongoing to put up double-digit declines at approximately all of Sands homes, other than the Venetian Macao, which was down only .one%. What is a lot more, the Venetian’s VIP earn jumped .67 points to three.75%. Coupled with a reasonably flat mass table efficiency, the Venetian’s gaming profits rose 13.five% to $670m.

Sands president Rob Goldstein told analysts he does not see Macau’s VIP market place returning to its previous glories at any time shortly, if at any time, specially given China’s latest anti-gambling moves. When Sands “won’t convert away” VIP business, Goldstein explained the corporation continues to be targeted on the mass and premium mass markets.

In Singapore, Marina Bay Sands’ profits rose one.6% to $762.6m mainly on the strength of its non-gaming gains. VIP turnover fell a lot more than one particular-3rd but VIP earn rose .64 points to three.twenty five% and slots manage rose one.four% to $three.45b.

In Las Vegas, overall profits at the Venetian and Palazzo was flat at $383m as an eight.three% rise in room profits offset a four.6% decline in gaming profits. In Pennsylvania, Sands Bethlehem profits nudged up one.6% to $146m many thanks to a five% rise in slots engage in.

THE PARISIAN AND THE BEHEMOTH
The Parisian produced profits of $68.6m and earnings of $19.2m in its initial 18 days with an occupancy charge of 87.five%. Goldstein explained the new home was building foot targeted traffic like he’d by no means noticed, with queues of men and women forming to just take selfies in entrance of its replica of the Eiffel Tower.

Sands manager Sheldon Adelson explained the “amazing thing” about the Parisian’s start is that the corporation has noticed no cannibalization at its other homes. Without a doubt, the corporation claims its overall lodge occupancy rose subsequent the start.

Adelson explained that a coated pedestrian bridge connecting the Parisian to Sands’ other Cotai homes would be accomplished this thirty day period. After that is finished, customers will be ready to check out all of Sands’ Cotai homes with no at any time getting to depart air-conditioned comfort and ease.

Adelson called this indoor model “one-end buying for everything” that is “unprecedented in the environment.” The four interconnected resorts present 840 merchants across four buying malls, approximately 13k lodge rooms, four efficiency venues and 2m-sq.-toes of conference and exhibition place.

OSAKA “THINKS WE’RE THE BEST”
Adelson also dealt with latest stories of a revival of Japan’s casino legislation. Adelson explained there was “99% to 100% certainty” that the casino study monthly bill would occur up for a vote in the current Diet regime session despite the fact that he professed ignorance as to whether this year’s monthly bill experienced been altered from past versions.

Adelson emphasised that Sands “have men and women there” in Japan lobbying furiously to preserve its identify at the best of the record of opportunity casino licensees. Adelson claimed the governing administration in Osaka “thinks we’re the very best company” to make a casino but he expressed some concerns about whether that would depart Sands out of the operating for a Tokyo casino license.

Adelson also explained that tiny birdies have told him that if/when Japan formally authorizes its citizens to enter casinos, the governing administration in South Korea will “rapidly do the same,” soon after which Sands will resume its thrust to make a important integrated vacation resort in possibly Seoul or Busan.



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