The Wynn Macau Limited subsidiary of American casino operator Wynn Resorts Limited is reportedly boosting the amount of commission it pays Macau’s many junket operators so as to recover from the downturn in business created by the recent coronavirus shutdown.
According to a report from GGRAsia, Wynn Macau Limited is responsible for the 1,000-room Wynn Macau as well as the even grander Wynn Palace Cotai and recently lost up to $39 million as a direct result of the enclave’s 15-day casino shutdown. The Hong Kong-listed subordinate is also said to be struggling to reenergize its business in the wake of the coronavirus scare and the temporary near ban that remains in place for visitors from the Chinese mainland.
Extraordinary event:
Citing a filing from Credit Suisse AG and GGRAsia reported that Wynn Macau Limited is now hoping to revitalize its operations and grow market share by raising the commission it distributes to junket operators by 2.5% to a very attractive 42.5%. The brokerage purportedly moreover declared that the move represents the first time in 14 years that the operator has implemented such an increase in hopes of attracting more VIP players from around the world.
Continuing changes:
The note from Credit Suisse AG analysts Rebecca Law, Kenneth Fong and Lok Kan Chan reportedly furthermore detailed that the commission rise comes after the Wynn Resorts Limited subsidiary had ‘doubled its junket credits from one month to two months of advanced commission’ and is expected to see it ‘gain VIP share despite lower margin’.
Competitor concern:
The investments firm additionally reportedly predicted that the move could see Macau casino rivals Galaxy Entertainment Group Limited and Melco Resorts and Entertainment Limited ‘lose share given similar positioning’ in regards to their base of high-value punters although both may now spend ‘more marketing dollars’ so as to ‘reactivate players’.
Positive forecast:
Regarding a possible return to normality for Macau’s casino market and Credit Suisse AG reportedly advised that demand is likely to ‘re-open in phases’ beginning from the end of next month as China eases travel restrictions earlier implemented to stop the coronavirus strain from spreading. It also purportedly proclaimed that large coastal cities such as Shanghai and Shenzhen will most likely be the first to have their constraints reduced before being joined by inland compatriots in June or July.
Reportedly read the filing from Credit Suisse AG…
“Industry participants see demand likely to normalize in the fourth quarter as [China] visas re-open in phases. If the summer holiday and exam [system] is delayed in China, the demand is likely to normalize in fourth-quarter 2020.”
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