Macau junket operator David Group to close gaming rooms

Macau junket operator David Group to close gaming rooms
Casino chips and poker cards.

HONG KONG - One of Macau's largest junkets plans to shut its local VIP rooms in the next few months, Nomura researchers said, as casino revenues in the world's biggest gaming hub take a hit from China's campaign against graft and conspicuous spending.

David Group's market share of Macau's VIP market is 3-5 per cent, Nomura said in a research note, citing data from industry newsletter Macau Gaming Gazette.

The group has a total of seven VIP rooms in some of the former Portuguese colony's biggest casinos.

"It appears that the David Group will seek to shut down its VIP rooms in an orderly manner and in several phases over the next few months and will seek to collect all debts outstanding,"the research note said.

David Group officials did not respond to a telephone call seeking comment.

Junkets connect China's wealthy punters to Macau's casinos, which have lost a combined $58 billion (S$76.8 billion) in market value over the past six months as VIPs stayed away, deterred by a Chinese government campaign against graft.

Without junkets, casino operators such as Las Vegas Sands Corp and Melco Crown Entertainment would have to rely on mass-market gamblers or extend VIP credit directly - a practice that has led to write-offs in places such as Singapore, where junkets are tightly restricted.

In Macau, some junkets are waiting for as long as a year to collect their debts, crippling the industry.

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