Suncity boss: VIP sector not replaceable, full-smoking ban worsening drop

The boss of junket operator Suncity Group, Alvin Chau, said in an interview with a Chinese-language media outlet that while some junkets are shutting down business he thinks that the VIP sector cannot be replaced by the mass market

Alvin Chau Cheok Wa, owner and chairman of the city’s largest junket operator, Suncity Group Ltd., said that the closures of some VIP rooms in Macau was to be “expected” but claimed that the mass market could not replace the VIP sector.
The junket head said in an interview with local Chinese media outlet Macau Asia Satellite Television Company (MASTV) broadcast late last week that it was to be expected that the market would eliminate weaker contenders whilst the strongest would survive.
According to MASTV, the chairman of the junket operation perceives that the VIP business in Macau only loans money for gaming. As such, following the anti-graft policy of the central government, as well as some junket operators with bad debts, the closure of some of the VIP rooms could have been foreseen.
He indicated that this model of business in the VIP industry in Macau is also a reason leading to the slowdown.
“Won’t they lend [to VIPs] in Singapore, Korea, even Las Vegas or in Japan in the future? Of course they will. It’s only because the scope of [the VIP industry] here is too small and concentrated [on loans] too much in the past, thus a negative bubble has been created,” he said.
Regardless of the VIP business slump, Mr. Chau told the media outlet that the sector is still very important for the whole industry, especially as revenues generated by the sector account for as much as 70 per cent of total gaming revenue.
“If there are no VIP rooms, [despite] the proportion of the mass market getting bigger, the drop in gaming revenue will remain serious,” he said.

Full smoking ban
means bigger drop

During the interview, Mr. Chau also said that he predicts that the VIP sectors will see their business drop by 15 per cent more following the implementation of a full smoking ban.
“Even Singapore, with its strict government, let gaming operators build indoor smoking rooms inside the casino when it opened the gaming market, [so that there are] smoking areas and non-smoking areas. I think that on such ‘cold days’ of the industry, if there’s no transitional period for the implementation of a full smoking ban, or a smoking area [allowed] nearby [the gaming rooms] the revenues of the gaming industry will slump by at least 15 per cent,” he said.
Expanding his businesses in the Philippines, Malaysia and Singapore, Mr. Chau, however, told MASTV that Macau still has its advantages in the short term, indicating that the competitors of the city’s junket operators are those in nearby regions, rather than themselves.
He indicated that the VIP industry should review and improve their business during the adjustment phase of the gaming industry in order to increase their recognition by government and tourists.

20,000 signatures
urge implementation
of full smoking ban

Meanwhile, local gaming union Macau Gaming Enterprises Staff Association, a subordinate of the Macau Federation of Trade Unions, handed a petition of nearly 20,000 signatures to government headquarters on Friday morning, urging the government to legislate on smoke-free casinos within this year.
The director-general of the Association, Choi Kam Fu, told reporters that the limits of fines punishing a casino not posting smoking ban signs is too low, and not an effective deterrent. It is suggested the government include records of violations of the smoking ban as one of the factors taken into consideration regarding the renewal of gaming licences during the interim review of the gaming industry, according to TDM Radio.
Recently, local gaming operator Melco Crown Entertainment Ltd.’s casino-resort City of Dreams was fined MOP100,000 (US$12,500) by the Health Bureau for failing to post a sign prohibiting smoking in a section of its casino.