Macau Gambling Giant Galaxy Entertainment Group has terminated all its VIP travel agreements. The company no longer has any such business at this time, Vice President Francis Lui Yiu Tung announced Wednesday.
“As far as VIP lounges and junket operators go, I think that’s a matter of grave concern for everyone, but I can tell you that our group no longer has junket operations“, declared the vice-president, according to Macau Business.
The executive further said that Galaxy is looking forward to new amendments to the city’s gambling law, currently under discussion at legislative Assembly (AL). According to him, the group will wait for what the new legislation determines regarding junket intermediaries before “evaluating the situation further”.
The decision to terminate the junket deals comes amid heightened regulatory scrutiny from VIP gaming market officials. Other operators of the world’s largest gaming hub have also decided to halt junket operations, including Melco Hotels, Sands China and Wynn Macau.
In November, Alvin Chau Cheok-wa, boss of Suncity, at the time Macau’s largest tour operator, was arrested to launder money and facilitate illegal cross-border gambling. It was followed by the arrest of Levo Chan Weng Lin, chairman of Tak Chun Group, a company second only to Suncity Group in terms of gambling market share in the pre-pandemic years.
Earlier this year, Macau’s gaming regulator, the Gaming Inspection and Coordination Officenearly halved junket licensing to 46 licenses. A smaller list of junkets should “help reduce problems” in the industry.
Although the proposed new gambling law does not outright ban junket gambling, it does state that casino operators could no longer have dedicated junket rooms.and revenue-sharing agreements between casinos and junket operators would be prohibited.
However, some details about the regulation of the junket industry remain unclear. On Friday, Macau’s gaming regulator met with officials from the city’s Gaming and Amusement Promoters Associationwho expressed their concerns about the changes and the future of the sector.
Galaxy said that while VIP activity continues to be targeted, it is unlikely to impact the company’s bottom line or revenue.. The group has taken steps in recent years to shift away from this segment.
“We were the first operator to return to profit in 2021 and we were able to pay dividends,” said Francis Lui., according to the cited source. “It shows that what happened to the VIP sector did not have a significant impact. In the future, we will definitely expand our business other than games, entertainment, MICE, etc..”
The executive also addressed the question of what will happen with “satellite casinos” under the new gambling law.. These are venues that are not located on premises owned by gaming dealers operating in Macau, and about 20 of them currently exist in the city.
The bill includes a requirement that any casino operating in Macau must be established in an asset owned by a gaming concessionaire.. This would, in turn, imply that the current satellite casino system would have to be shut down, as it would not be compliant.
A three-year transition period is to be granted under the bill to entities responsible for properties holding casinos operated under service agreements to create “closer ties” with one of the six concessions to be given in the future. However, no further details have yet been provided in the law on how an asset transfer would take place.
Galaxy is poised to take a “wait and see” approach to the problem. The group currently has three satellites city club casinos operating under its licence: Waldo Casino, President Casino and Rio Casino. The company’s vice president said it was “too early” to say what will happen and the gaming giant will decide how to proceed “once we have more details.”
“The new bill provides for a buffer period of three years,” said Francis Liu. “I’m sure there will be enough time for the City Club boss and ourselves to sit down and consider the situation and decide what will be done.”
Regulatory issues aside, Galaxy also revealed confidence in its Phase 3 expansion of Macau Galaxy opening its first offerings by the end of this year or the beginning of 2023. Construction work is now substantially complete and the company is working with the government on issuing the necessary permits.