The clampdown on underground banking in China has been the main reason for the sharp decline in VIP gambling, says Steve Vickers, CEO of Steve Vickers and Associates in an interview with Macau Daily Times.
Vickers, who runs a political and corporate risk consultancy, said the severe decline in VIP betting had been blamed on the ongoing anti-corruption campaign in the mainland, along with China’s moves to stop the illegal flow of capital from the country. However, the real reason is the closure of shadow banks, which have caused “many gamblers who used these facilities to service their gambling debts… with no viable option,” said Vickers. “[It’s] the single biggest reason accounts receivables [unpaid debts] of junket operators have been steadily climbing.”
Vickers said the economic slowdown, as well as the reassessment of liquidity movements, is bad news for the gaming hub, added that another Beijing policy to affect gaming growth is the requirement that “Macau gaming not grow faster than the national growth rate of GDP” and that the city diversify its economy.
Western companies will also face strong local competition in the granting of gaming licenses in 2022, says Vickers. Noting that “another economic policy that has gained favor with the current PRC government is one involving elements of economic nationalism, favoring local champion(s) over the foreign investors in the same sector.” The “badly needed Western gaming experience and management practices… will not be so true in 2022.”
In regards to the threat of an Islamic terror attack in Macau and Hong Kong, Vickers said that overall risk is moderate, “no more or less vulnerable than other targets,” but said an attack should not be completely ruled out.