Macau casino junket operators have started 2016 off on the wrong foot, as word spread of yet another internal theft.
On Wednesday, the Macau Daily Times reported that the Macau Judiciary Police (PJ) had confirmed the suspected theft of at least HKD 99.7m (US $12.5m) from a junket operator working out of L’Arc Macau, which operates under an SJM Holdings license.
The PJ said it received a report on Sunday (3) regarding a man with the surname Chan who held a senior position at the junket operator in question and who has apparently not been heard from in some time. Police are investigating the report but no arrests have been made.
A Bloomberg News report from last year noted that the VIP room on L’Arc’s 21st floor featured signage belonging to the Heng Sheng Group, one of Macau’s top junket operators. However, junket investor Iao Kun Group Holdings also has a presence at L’Arc, and their L’Arc promoter’s surname is Chan.
Junkets were just getting over the shock from the September 2015 news of a massive internal theft by a Dore Entertainment Co Ltd staffer. Initial reports claimed as much as HKD 2b had been purloined, while subsequent reports whittled that down to ‘only’ HKD 700m.
In 2014, a Kimren Group junket investor allegedly made off with between HKD 8b and 10b, although here again, exact figures are the subject of much speculation. What is not in dispute is the toll these thefts are taking on junket investor confidence, which will put further downward pressure on already thin junket liquidity.
Even before Tuesday’s report, analysts were bearish on the junket industry’s outlook for 2016. Union Gaming Securities Asia issued a note on Friday saying junkets faced “an even tougher 2016 than 2015,” forecasting that VIP gaming revenue would shrink by another 12% in 2016.
