Macao’s High Roller Junkets Bring In Mainland VIP Clients
In an attempt to attract more VIP clientele from mainland China, Macao has introduced VIP junkets to draw in the mainlanders to the city.
Macao is the gambling mecca of Asia and the only territory in China where gambling is officially legal. Additionally, over the past decade, Macao has overtaken Las Vegas as the world’s gambling capital. Macao’s casinos now generate five times the revenue of their Sin City counterparts. One of the reasons for Macao’s popularity is the introduction of junkets that offer VIP services to Chinese nationals.
The junkets commute people from mainland China to Macao as VIPs due to the illegal status of gambling in China. However, there now seems to be a consensus that Macao is too overdependent on gambling, which needs to change.
The Chinese government has actively undertaken a crackdown on corruption and boosted efforts to revive the Chinese economy that has taken a slump. Macao serves as a tourist hotspot where people come from far and wide to enjoy the city’s spectacles. The city endured a massive economic recession between 2014 and 2016 when it tried to reach mass markets rather than focus on VIPs.
Investments in hotel infrastructure and hospitality hardware have contributed significantly to the economic rise of Macao. But a large part of the capital has been trickling from an unlikely source. Over the past few months, the return of VIP gamblers coincided with the recovery of the Macanese economy.
Introduction of Mass Markets
The government’s effort to introduce mass markets in Macao’s casino industry may appear successful. But when compared to the VIP gambling revenue, it pales in comparison. In the first half of this year, the revenue generated from high rollers funded by junkets has grown significantly.
In comparison, this revenue is double what the mass markets bring in. Most people might believe that the mass markets have a more substantial influence, but it is hard to argue with the figures. The VIP market is now more robust due to the speed of its growth.
Arrests in China
Recently, the police in China arrested several Crown Resorts employees. After the arrests, it became evident that mainland China was far from an ideal place for gambling houses to operate. Most casinos have subsequently shut down their operations in China and now rely solely on junkets for marketing and delivering VIPs to their casinos.
Suncity Rewards Programme
Suncity is one of Macao’s best junket operators and has devised new ways to tap into a rapidly growing market. The operator offers a package where high rollers can attend a car racing event through their services. The company has also introduced a rewards programme through which players can redeem points accumulated from bets in exchange for luxury items. The rewards programme has helped boost the betting volumes by 30 per cent over the past year. It is estimated that there should be a 20 per cent increase for the junket when high rollers use the wagering credits extended to them.
The programme is marketed to people across mainland China to restore the popularity of Macao, which had been hit by a slowdown resulting from a government anti-corruption drive. The diversity of the junket, which incorporates entertainment and travel features, has helped it evade Macao’s regulators that are bent on restricting the gaming industry. The travel offerings shield the junket from regulations because these are not directly tied to gaming and could, therefore, be advertised in mainland China.
The company has also strengthened its brand by staging concerts and other social events to attract people to the Macao Strip. The company even used private jets to transport clients to an event in Manila, housing them in lavish accommodation there. The VIP rooms offered by the junket have also registered growth. However, despite the attempts to increase the oversight of Macao’s gaming industry, US$30 billion in winnings were declared by VIPs over the past year.