International edition
September 25, 2021

The Macau model for gambling junkets is “near broken,” Standard Chartered says

Junket operators taking up to one year to collect

(Macau).- Macau junket operators are waiting up to one year for mainland gamblers that borrow from them to repay their debts, crippling the VIP gaming business model, Reuters reports. The news agency quotes junket consultant Tony Tong as saying junket operators usually collect their debts within 30 days and charge interest rates as high as 3 percent per month on whatever is overdue.

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ow the junket operators are holding an increasing amount of bad debt as the mainland’s economy grows more slowly and the mainland authorities act to curb corruption. “The business model looks near broken,” Reuters quotes Standard Chartered analyst Philip Tulk as saying. 

Macau junket model near breaking point, bank says

The Macau model for gambling junkets is “near broken,” Standard Chartered says. The bank says VIP gaming promoters are finding that funding and liquidity are tight and have difficulty obtaining capital, leading to weaker rolling volumes and margin pressure.

The campaign against corruption in the mainland has deterred people there from flaunting their wealth by gambling in Macau, and the slowing of economic growth in the mainland has also tempered the urge to gamble.

“We see these issues persisting well into a China easing scenario,” the note says.

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