he December issue of Inside Asian Gaming examines junkets turning to casino ownership, while continuing the main junket business, through case studies of Jimei Group in the Philippines and Macau, Hengsheng Group in Saipan and Suncity in Vietnam, including an interview with Suncity chairman Alvin Chau, the biggest player in Macau’s junket game.
Research by University of Macau gaming expert Ricardo Siu says junkets actually make more money per VIP dollar bet than casinos in those jurisdictions, raising questions about why they want junkets to grab the smaller slice of the pie. Pacific Financial Services founder Tony Tong, a junket adviser and investor, says junkets believe they eventually lose their customers to casinos or receive unfair treatment from them, so seek ways to protect themselves. “If not complete ownership, junkets want a significant stake to have a say in the operations,” Tong says.
Jimei came to own and operate Fontana Leisure Parks a decade ago through its longstanding business ties to the Philippines. Macomber International president Dean Macomber, who once ran Fontana, says the resort’s success as both a retreat from Manila’s urban sprawl – Fontana occupies the officer’s housing area of the former US Clark Air Force base that’s laid out like a US suburb – and a gaming destination is largely a tribute to Jimei chairman Jack Lam. Jimei also has a Macau casino of its own, a product of its long relationship with SJM Holdings, under whose license the Jimei Casino operates.
Parties linked to Hengsheng, a relative newcomer among junkets and backed by mainland money, bought a Hong Kong stock market shell company it renamed Imperial Pacific International Holdings. The group began pursuit of a gaming license in Saipan, the largest island in the Commonwealth of Northern Marianas Islands, a US Pacific territory where casinos on other islands have had mixed success. Through subsidiary Best Sunshine International, Hengsheng won the license, found a site for the first hotel in its ambitious $7.1 billion development plan and last week announced an agreement with a venerable Japanese owned resort to take over its lease and locate its major resort there. It’s also opened a training casino in a shopping mall that reported $1.6 billion in VIP roll last month.
Suncity was announced in March as a partner in Vietnam’s Hoi An South integrated resort project with billionaire Cheng Yu-tung’s Chow Tai Fook Enterprises and investment firm VinaCapital. Suncity’s share is believed to be a token interest to encourage it to put its marketing muscle gets behind the project, if and when it is built. Alvin Chau says Hoi An South is the first step in Suncity’s ambition to create a chain of boutique casino hotels across Asia.
In his Inside Asian Gaming interview, Chau also said he was unperturbed by Melco Crown Entertainment’s Studio City debuting as Macau’s first IR without VIP gaming tables. “It’s just a matter of table distribution by the government – delaying the distribution of VIP tables till next year,” Chau said, “It is known that their license for VIP rooms hasn’t started.” Another leading junket executive made the same point in a separate interview.
Macau gaming regulator DICJ didn’t respond to a request to comment on Chau’s assertion, which runs contrary to the prevailing notion that casinos can do whatever they want with the gaming tables Macau licenses to them. Melco Crown co-chairman and CEO Lawrence Ho said forgoing VIP play at Studio City was strictly a business decision, “a no-brainer,” under current conditions. At a time when high roller revenue remains the biggest factor in Macau’s revenue decline and casinos are cutting back on VIP tables for business reasons, adding a regulatory barrier to VIP gaming seems like the sort of meaningless gesture that observers might expect from Macau authorities.