Vegas’ mixed message; China puts the squeeze on Macao

Macao casinos find themselves between a rock and a hard place, as Beijing clamps down on the movement of cash and high rollers retaliate by pulling their funds from junketeers, hobbling VIP tourism to the enclave. Reuters described the capital flight as an “unprecedented stampede.” This comes at a time when casinos had been banking on an imminent comeback in VIP play, a devilish turn of events. The central government may have the last laugh—despite being unamused by the defection of high rollers to overseas markets—by blacklisting VIPs from certain foreign jurisdiction. No names are mentioned but the Philippines springs to mind. With VIP play accounting for half of Macao’s $36.5 billion/year haul, the guvmint’s desire to make the whale disport themselves close to home is understandable, if decidedly authoritarian.

Reports Global Gaming Business, “The junkets have been a mainstay of the Macau industry for their ability to recruit high rollers on the mainland, where casino marketing is prohibited, arrange for their travel and accommodations and other perks and bankroll their wagering in contravention of China’s strict currency controls.” The casinos are making some CYA moves of their own, cutting the amount of chips that can be issued by 80%, to $129,000. Credit Suisse analysts forecast the high-roller pullback will “scale down over the next few years, dragging the pace of recovery.” It may also spill into the coveted premium-mass sector, on which companies like Wynn Resorts and MGM China are dependent. “Without a healthy VIP junket system, casinos would lose one of the key sources to grow their premium mass players, as these players lost one of their major channels to move money,” explains Credit Suisse. To compound the pinch, it comes as visitation to Macao is finally recovering, up 200% in August from the preceding month (but 93% from the same time last year). However you slice it, Macao has a long road to recovery, one that might even make Las Vegans feel smug—and who could blame them?

Jottings: Emboldened by the opening of its first Barstool Sports-branded book in Pennsylvania, majority owner Penn National Gaming issued $1 billion worth of new shares. Penn hopes to capture the same sort of investors who have flocked to DraftKings … “Fraudulent acts” as the boss of Universal Entertainment are going to cost former CEO Kazuo Okada $204,000 in Japanese fines. Okada is becoming one of the biggest losers in gaming … Ever heard of the Nevada Gambling Treatment Diversion Court? It’s a forum for people who have overstepped the law while in the throes of disordered gambling and Judge Cheryl Moss runs it with solomonic wisdom … Rivers Casino Philadelphia is being accused of sweeping Covid-19 problems under the rug and not enforcing safety standards. Said one employee, “The supervisors are afraid of the players. They haven’t been trained properly and they’re afraid to say something.” To add insult to injury, workers had to take a 15% pay cut when they returned.