Macau junket scandal not hurting VIP business yet

The scandal involving junket operator Kimren doesn’t appear to have had a negative impact on the junket system, based on revenue from the past week, UBS said in a note. The firm says in the first four days of May Macau table games daily revenue reached around HK$1.35 billion ($174 million) per day, a jump from the year-to-date average of HK$1.05bn, helped by the China May holidays. “This is consistent with our checks with some casino operators, who also noted nothing abnormal in their VIP room activities and in the financial health of the junket partners,” it said. Reports last week suggested that one of the principals of the firm had absconded with about HK$8 – $10 billion. “If there had been HK$8-10bn missing from the junket’s cage working capital, we would have expected VIP volumes to have dropped off precipitously by now, leading to a much weaker headline revenue trend,” it said. UBS added that its main concern when it comes to the VIP business is the slowdown in China’s economy