SBC News Macau crackdown sees windfall for Asian casino operators

Macau crackdown sees windfall for Asian casino operators

korea

Recording its first ever downturn as a gambling hub, Macau has seen a revenue decline of 2.6% to $44 billion (2014). After a decade of expansion, Macau is now the centre of the Chinese Security Ministry and President Xi Jinping ongoing fight against corruption.

The city’s misfortune however has proved to be beneficial to other Asian casino operators, who have lured high value gamblers to their enterprises.

As the Chinese Security Ministry has targeted banking transaction, to help stop money laundering in China, high value Asian gamblers have to chosen to gamble in casinos in South Korea, Cambodia and Australia.

Casino operators such as Paradise Co. in South Korea are hiring Mandarin-speaking staff and offering VIP treatment including free flights, limousines and hotel stays to big spenders. Echo Entertainment Group Ltd. of Sydney and NagaCorp Ltd. in Cambodia cater to the junket operators who organize trips for Chinese gamblers with perks such as higher commissions, lower taxes and private jets.

The operators are able to lure and market to Chinese consumers by side-stepping Chinese gambling advertising restrictions by advertising non-gambling activities such as entertainment, nightclubs and restaurants

Bloomberg Asia reports that South Korean casino resorts are preparing to welcome up to + 6 million Chinese gamblers in 2015. The resorts have set up a service to allow Chinese customers gambling loans, a service to that is common in order to sidestep China’s limits on taking currency abroad.

Macau analysts have estimated that its corruption campaign has wiped out $73 billion in market value of companies including Wynn Macau and SJM Holdings.

In 2014 XI Jinping had warned Macau officials that the province needed to end its reliance on gambling and look to attract other business industries to operate in the region..

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