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Hurdles ahead for Macau premium gaming recovery: expert
Feb 22, 2023
Macau casino operators face challenges regarding business recovery to pre-Covid-19 levels for the so-called ‘premium’ gaming segment, said industry consultant Alidad Tash, in comments to GGRAsia. They include uncertainities regarding how frequently such gambling customers will visit Macau from now on, and what impact, if any, the constraints in remaining junkets might have on the capital liquidity of the city’s casino industry.
Referring to the easing of Covid-19 countermeasures for the Chinese mainland, Macau, and Hong Kong since early January, Mr Tash observed regarding China’s exit visa policy for trips to Macau: “Unfortunately, each province in China operates differently and independently.
So whereas Guangdong may actually allow these people to come as often as possible, another one may decide to make it much more difficult. It’s very sporadic.”
Mr Tash, a former senior executive in the Macau market and managing director of the 2NT8 Ltd consultancy, was speaking on the sidelines of a Wednesday event by France Macau Chamber of Commerce.
Earlier he had told the audience that the decline in Macau’s junket sector, which he said was in the context of higher regulatory scrutiny locally and in mainland China, might also in the future affect access to gambling capital for certain patrons in the premium segment. He mentioned that networks outside the mainstream commercial banks had previously helped the flow of gambling funds for credit-based Chinese patrons of junkets, and might also have done so for some cash-based premium players.
Elaborating on that to GGRAsia, Mr Tash stated that in the post-Covid market, “some junket players may become actually premium mass or premium direct,” the latter a reference to house-managed VIPs.
“I think, on the whole, they [Macau casinos] are going to have a hard time going back to the previous levels. That was my fear the day after the famous arrest,” he added, referring to Alvin Chau Cheok Wa, boss of the former Suncity junket brand, who was detained in November of 2021, and this year sentenced to 18 years in prison for gambling-related crimes.
Using a term that has also been mentioned recently by investment analysts, Mr Tash referred to “revenge gambling” by mainland Chinese making up for several years without a visit to Macau. Whether such a flurry will translate into a sustained recovery in premium play, will take a few more months to assess, Mr Tash suggested.
Though he asserted that Macau retained a certain “advantage” because of mainlanders’ cultural affinity with the city.
Regarding Macau realising its policy aspiration of attracting more gaming patrons from overseas, the city also faced hurdles relative to other operators in the region.
He told GGRAsia: “Lots of additional integrated resorts are coming [into the market] and they’re all very welcoming. Koreans are treated much better in Manila, and in Vietnam, than they are in Macau,” because the outside locations “have the facilities, the service,” to attract such customers.
Rebuilding Macau’s air links to regional markets, and Macau casino resorts being able to assemble the right team – including recruiting a greater number of marketing professionals with knowledge of overseas consumers – would be essential for Macau to succeed in appealing to foreign players, said Mr Tash. A factor in that, would be optimising local processes for importation of labour, he stated to GGRAsia.