International edition
October 28, 2021

Private jets and pop concerts lure high-rollers

Suncity stages its own events to help boost betting volumes in Macau

Suncity stages its own events to help boost betting volumes in Macau
“High rollers will continue to drive the growth of Macau’s gaming revenue,” said Chau.
Macau | 11/24/2017

Suncity Group’s version of a credit-card rewards program, in which bets at tables become points that can be redeemed for luxury items, has become such a hit that it’s helped to grow betting volumes more than 30 percent this year, Alvin Chau, the firm’s founder and chairman, said in an interview.

C

hau expects an additional 20 percent surge next year for the junket operator, which extends credit used by high rollers to gamble.

The company is marketing the program to bolster its brand among wealthy Chinese who are returning to the world’s largest gaming center after a slowdown driven by China’s anti-corruption drive. The program’s travel and entertainment features are also helping it deliver on a key demand by Macau regulators for the industry to provide more offerings that are not directly tied to gaming.

Suncity is staging its own events, such as an August concert featuring Hong Kong pop-star Jacky Cheung that caused a traffic jam on Macau’s Cotai Strip. In May, it used private jets to shuttle clients to Manila for a party. And earlier this year, more than 5,000 of its VIP clients rolled into the territory for a spring dinner for its 10th anniversary. “These entertainment events have helped us boost betting volumes,” the 43-year-old Chau said last week in Macau. “We don’t need to wait for Golden Week holiday to have the Golden Week revenue.”

The junket’s VIP rooms in Macau have recently topped US$ 19 billion in monthly bets placed at its tables. High-stakes players have helped drive casino revenue to a three-year peak in October. The rebound comes amid regulators’ push to increase oversight of an industry that posted almost US$ 30 billion in game winnings last year.

Casino operators are responding to the regulators’ call to expand offerings to attract tourists. Las Vegas Sands will spend US$ 1.1 billion to renovate its Cotai resort into a London-themed complex following the opening of its Parisian project last year to attract more mainstream Chinese visitors. Wynn Resorts also opened its US$ 4.2 billion Wynn Palace in 2016, with a gondola ride around a lake that features synchronized fountains.
Suncity also feels the pressure to add more offerings that go beyond gaming, Chau said. “Gambling is a very sensitive word on China’s mainland,” he said. “Our business is not considered ideal because our casino takings are far more than non-gaming revenue. So we are investing hard on travel products to dilute the emphasis on gambling.”

Luxury Gifts

Chau acknowledged the approach benefits his company and casinos as well as meets the government’s call. Suncity said its market share amounts to more than 40 percent of Macau’s junket business.

Suncity started to develop its membership program a decade ago when the company was founded. Through a rewards system, clients are given points when they bet. Those can be redeemed for luxury jewelry, travel packages, the use of private jets and hotels. Suncity also stages big events such as concerts and gala dinners for which clients are ferried in chauffeur-driven cars sporting the Suncity logo.

Its listed company, Suncity Group Holdings, is also exploring opportunities to operate casinos in overseas markets including Vietnam and Japan, as well as in Macau. The junket business is separate from the operations of the listed unit. Shares of Suncity have more than doubled this year, compared with a 36 percent gain in the benchmark Hang Seng Index.

The casino business still overshadows tourism-related offerings. Unlike the Vegas Strip where about two thirds of its revenue come from non-gaming elements, Macau relies on gambling for 90 percent of its total from integrated resorts.

“Gaming will continue to be the primary industry for Macau,” said Vitaly Umansky, analyst at Sanford C. Bernstein & Co. “These tourist offerings can assist the development of the gaming industry in Macau, but are not in and of themselves meaningful without the casino.”

Macro risks

The VIP segment is exposed to China’s macroeconomic risks, such as deterioration in real-estate prices, in addition to the heightened oversight from government, said Umansky.

The enforcement of regulations has been tightening in recent years to deter capital outflows from the mainland, and to standardize requirements for junket operators such as stricter accounting standards. The government will consider whether resorts are following through on non-gaming commitments in evaluating casino concessions after the existing licenses start to expire in 2020.

Suncity doesn’t see this deterring the high rollers who have returned to the former Portuguese colony the past year. “High rollers will continue to drive the growth of Macau’s gaming revenue,” said Chau.

Yogonet.com / Bloomberg
Newsletter Subscription
Subscribe to receive the latest news and updates
Enter a valid email
Complete the captcha
Thank you for registering to our newsletter.