Macau casino shares fall as junket firm sounds alarm on VIP gamers

Rich Goldman Holdings

29/09/2015 04:08

HONG KONG, Sept 29 (Reuters) - Shares in several casino 
operators in Macau fell to around five-year-lows on Tuesday 
after Neptune Group  0070.HK , one of the gambling hub's biggest 
junkets, said it may have to wind down operations if the number 
of VIP gamers continues to fall. 
    The warning by Neptune is the latest in string of bad news 
affecting Macau's VIP gambling industry, which has come under 
increased scrutiny from the authorities due to Chinese President 
Xi Jinping's anti-corruption campaign which has targeted the 
flight of illicit capital from the country. 
    Shares in Neptune fell 4 percent to near four-year lows, 
while shares of casino operators Wynn Macau Ltd  1128.HK , 
Galaxy Entertainment Group  0027.HK  and SJM Holdings Ltd 
 0880.HK  dropped around 6-7 percent to near five-year lows. 
Sands China Ltd  1928.HK  slid more than 5 percent to a near 
three-year low. 
    Junkets like Neptune, which on Friday said annual earnings 
had dropped to a five-year low, facilitate loans for VIP 
gamblers which until early last year accounted for over 70 
percent of monthly gaming revenues. 
    Now, these VIPs account for just half of monthly revenues, 
putting several junkets out of business. Overall, Macau's 
gambling revenues have fallen for the past 15 months, and in 
July hovered around five-year lows amid Beijing's crackdown on 
corruption.   
    Grant Govertsen, analyst at Macau-based Union 
Gaming Securities Asia, said the outlook for the VIP gambling 
industry was set to worsen.  
    "While we do not believe Neptune is leaving the Macau scene 
we do believe that more junket closures are likely and that 
liquidity could increasingly become a concern that could drive 
further downside to the VIP story," he said. 
    One of Neptune's former major shareholders Cheung Chi-tai is 
facing three charges of laundering HK$1.8 billion through 
accounts in the financial centre. ID:nL4N11U1GA  
    Police are also investigating alleged fraud at another major 
junket operator Dore, which operates three rooms in U.S. mogul 
Steve Wynn's Wynn Macau.  ID:nL4N11R256  
 
 (Reporting by Farah Master; Editing by Miral Fahmy) 
 ((farah.master@thomsonreuters.com; +852 28431631 , +852 9631 
8262; Reuters Messaging: 
farah.master.thomsonreuters@thomsonreuters.net)) 
 
Keywords: MACAU GAMBLING/JUNKETS