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Galaxy Entertainment Group Limited report

Galaxy Entertainment Group Limited is the latest company to drop out of the junket business

Chris Grand |
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According to reports, Galaxy Entertainment Group is said to have gone ahead and joined Wynn Macau Limited and Melco Resorts and Entertainment Limited in publicly proclaiming that they’ll no longer be in engagement with junket companies

Based on a report released by GGRAsia, the Hong Kong-listed company did declare in an official filing that there are no gaming promoters currently operating at any of their Macau casinos. However, it declined to say when this policy was introduced. Before the outbreak of the coronavirus pandemic in the early months of 2020, Galaxy Entertainment was one of the firms serving high-value gamblers at its spectacular Broadway Macau, Galaxy Macau, and StarWorld Macau.

Diminishing distinction

As we’re speaking, Macau is home to approximately 85 junket firms that stand a chance to receive some sort of commission should they promote partner casinos to wealthy gamblers while at the same time handling VIP travel, accommodation, and foreign banking or other credit needs for an amount that mostly run into millions of dollars.

On the flip side, though, the number of such local entities seems to have been declining at an alarming rate since reaching highs of 235 back in 2013. While not proven yet, there are allegations that such could be as a result of some local enterprises having established links with some unscrupulous persons or even organized crime syndicates.

Previous problems

According to reports by GGRAsia, Galaxy Entertainment Group Limited’s decision wasn’t out of the blue, but following the unilateral cancellation of contracts with Macau’s 6 licensed casino operators by Tak Chun Group and Suncity Group, who happen to be junket heavyweights. In November, the firm’s CEO and the major shareholder, Alvin Chau Cheok Wa was arrested in China and charged with facilitating unlawful cross-border gambling.

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The move by Galaxy Entertainment Group Limited might have also been due to a section of Macau’s draft gambling bill that prohibits local casinos from entering into profit-sharing agreements with junket enterprises and other overseas management firms. The operator’s existing 20-year concession is slated to expire in June, and it is expected to want to seem compliant ahead of a potential application for a new ten-year concession.

Fiscal side

Finally, GGRAsia did report that there could be an economic element following the decision taken by Galaxy Entertainment Limited, Wynn Macau Limited, and Melco Resorts and Entertainment Limited in doing away with their use of junkets. VIP baccarat games purportedly generated almost half of the former Portuguese colony around $36.47 billion in terms of aggregated gross gaming revenues in 2019 alone. However, the figure dropped in the final three months of last year standing at about 25.7%.

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