Junket Theft Charges Could Lead To More Government Regulation In Macau

In a new report, Stern Agee CRT analyst David Bain discussed the results of the firm’s most recent channel checks on Macau gaming companies. Bain also highlighted what he sees as a growing risk of regulatory headwinds for Macau operators.

GGR Checks

After channel checks on September 1–20 performance, Bain projects an overall September gross gaming revenue (GGR) number of MOP17.5 for Macau – a 32 percent year-over-year (Y/Y) decline. He noted that Macau GGR numbers should see a boost from the upcoming Mid-Autumn and Golden Week holiday period.

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Dore Blowback

Macau junket operator Dore Entertainment Corp recently filed a police case alleging that an ex-cage manager stole up to $258 million from the company.

In his report, Bain expressed concern that the crime will further pressure the Macau government to crack down harder on junket operators. “Macau’s Gaming Inspection and Coordination Bureau now says it will look to strengthening requirements for junket/promoter capital and shareholder structures, and look to potentially tighten rules for junket/promoter accounting and auditing,” he explained.

Market Share

So far in September, channel checks indicate that the biggest month-over-month Macau market share gainer in Macau has been MGM Resorts International (+3.2 percent). Wynn Resorts (+0.5 percent) and Melco Crown (+0.9 percent) have also gained share at the expense of Las Vegas Sands (-6.0 percent).

Sterne Agee CRT currently has Buy ratings on Las Vegas Sands, MGM, Wynn and Melco Crown Entertainment.