Junkets under strain, Daiwa says

Macau’s small and mid-sized junket operators may be feeling the strain as liquidity tightens, Japanese investment bank Daiwa Securities was cited as saying.

Six VIP rooms have been vacated by smaller junkets, while larger operators are stepping in to take up the capacity, it said. Three rooms were in Wynn Macau and three in City of Dreams, reports said.

The bank also said the disappearance of a principal in the Kimren junket, who reportedly went missing earlier this year with as much as 10.2 billion patacas ($1.2 billion) had also created difficulties.

“Some mid-sized junkets have shrunk their operations, while other small-sized junkets closed down,” it said. “The contagion on VIP and side-betting liquidity from the Kimren incident was a driving factor behind this. We expect this to be reflected in a year-on-year drop in VIP gross gaming revenue for June.”

The bank said the situation has improved since May, but not all principals have re-deployed the capital they withdrew from the system.

Overall it expects a rise of between 3 percent and 5 percent in GGR for June, though some other analysts are predicting a fall for the month as the detraction of the World Cup adds to pressure in the VIP market.

 

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