Macau casino concessionaire Wynn Macau Ltd says the premium customers it once relied on junket promoters to source remain as important as ever to gaming revenues, adding it must seek “alternative ways” to develop relationships with these players.
The comments, contained with the company’s 2021 Annual Report – published Friday – come after Wynn and other Macau casino operators terminated agreements with VIP gaming promoters late last year following the arrest of Suncity Group CEO Alvin Chau. The Macau SAR Government has also announced amendments to the city’s gaming laws that will limit how concessionaires are able to cooperate with junkets in future, including a ban on revenue sharing agreements and on junkets running their own VIP Clubs inside casinos.
In its Annual Report, Wynn Macau Ltd confirmed that it no longer has any agreements in place with gaming promoters but said the premium segment remains vital to the company’s ongoing success.
“We have historically depended on gaming promoters to generate gaming revenue and our ability to maintain or grow our gaming revenues could be adversely affected by the termination of our agreements with gaming promoters,” it said.
“Although the portion of our gaming revenue in Macau that has been generated by clientele of our gaming promoters has decreased in the last several years, gaming revenue from that clientele remains important.
“There is intense competition among casino operators in Macau for premium customers. Our ability to maintain or grow our gaming revenues may be adversely affected by the termination of our agreements with gaming promoters and we will have to seek alternative ways of developing relationships with premium customers.”
Outlining certain risks associated with its Macau operations, Wynn also referenced a November 2021 decision by Macau’s Court of Final Appeal which ruled that gaming concessionaires may be held jointly liable with gaming promoters for deposits made. In that decision, related to the high-profile theft of up to HK$700 million (US$90 million) from Dore’s VIP room at Wynn Macau in 2015, the court found Wynn and Dore jointly liable for repayment of a HK$6 million (US$770,000) debt owed to a VIP customer.
Wynn said in its Annual Report that the risk of similar actions in future remains, stating, “If any of our former gaming promoters violated Macau gaming laws while on our premises, the Macau government may, in its discretion, take enforcement action against us, the gaming promoter, or each concurrently, and we may be sanctioned and our reputation could be harmed.”
Wynn reported a HK$5.18 billion loss for FY21, narrowed from a HK$7.22 billion loss recorded 12 months earlier.