VIP GGR may slow amid junket operator scandals, analysts say

Recent scandals affecting Macau’s junket operators are likely to lead to a further slowdown in VIP gross gambling revenue growth, analysts say. Macau’s junket operators have come under increased scrutiny following recent reports that one of the principals of the Kimren junket may have absconded with about HK$8 to $10 billion, while another recent report said the wife of one of the owners of Neptune Group was detained in Hong Kong with liquid asset to the amount of HK$200 million. In a note commenting on the incidents, Goldman Sachs said the misappropriated funds come from a side-betting pool and therefore won’t be reflected in reported VIP GGR numbers. “This said, we believe this incident may affect junket operators’ ability to raise more new capital from partners or private individuals. Together with more stringent investigation on money laundering, we believe junkets may turn more cautious in credit extension leading to slower VIP GGR momentum in coming months, the note said.