Last week, Daiwa Capital Markets, an investment bank operating out of Hong Kong’s financial district has published a financial report stating that approximately $258 million is missing from a junket operator in Wynn Macau.
Junkets operate in Macau, effectively as third parties and are businesses that work within Macau’s billion dollar casinos, helping to get high rollers and big gamblers access to cash in order to gamble with. Junkets also operate by collecting debts that are owed to casinos and gambling companies. Since Macau is the only region in China where casino gambling is actually legal, junkets seek out the wealthy gamblers and lure them into the casinos with promises of free accommodation and access to other perks and amenities that the city of Macau has to offer. Revenue generated from high rollers is down by 56% in comparison to the same time last year.
Their operations are legal and necessary, as the Chinese government has placed restrictions on the flow of money into Macau, an administrative region of China.
The reports from Daiwa Capital Markets claim that that revenue generated from the gaming industry in Macau has dropped alarmingly over the course of this year. In 2014, profits from the gaming industry reached $44.1 billion, but even this figure is a 2.6% decline from the record breaking year of 2013.
The suspected heist to Dore Holdings the junket operator that takes charge of two VIP rooms in the luxury resort of Wynn Macau, has sent shares of Wynn Resorts, owner of the Las Vegas-style integrated resort, plummeting by 10% since news of the heist broke out. This is due to the potential damage that the heist may cause to the high roller market in Macau, which generates 50% of the gambling revenue on the small peninsula in mainland China.
No money was stolen from the resort directly, but Dore, the junket operator that accounts for 5% of the junket industry in Macau has taken a massive hit financially.
It is suspected that employees of Dore Holdings, specifically a cage manger working inside the casino made off with the cash.
If forecasts are to be believed, there are worse times still to come for the world’s largest gambling hub as the high rollers continue to be more conservative with their money and visitors think twice about spending large amounts of cash on the island.