MGM China also confirms termination of deals with junket promoters

MGM China has also suspended operations with its major VIP gaming promoters since December 2021, MGM Resorts said in the previous year’s annual report.

“We have focused our business on ground floor gaming operations and therefore we do not expect VIP gaming operations to be a significant source of revenue in the coming years. The majority of MGM China’s casino revenue has been provided by ground-based gaming operations for the past few years and we expect this customer base to be the primary source of growth going forward,” the parent company noted in a filing with the US Securities Exchange Commission.

So far, gaming concessionaires Melco Resorts, Wynn Macau, Sands China and Galaxy Entertainment Group have all confirmed that they have terminated agreements with their previous travel partners since December last year.

The rulings followed the high-profile arrests of two of the leading figures of the city’s two biggest junket groups, Suncity and Tak Chun, and the disclosure of the new gambling law amendment which includes several restrictions on promoters. games.

Under the proposed bill, each game promoter can only carry on the game promotion business for one licensee, revenue sharing agreements between licensees and game promoters are prohibited, game promoters n do not have the right to exclusively operate the restricted areas of casinos and game promoters are limited to only providing support to dealers in promoting casino game activities through commissions.

The bill is being debated and approved by the Legislative Assembly and is currently being reviewed by a standing committee.

A recent Court of Final Appeal verdict emphasizing that gambling operators share liability with gambling promoters over deposits in VIP rooms has also been pointed to as one of the main reasons for the end of partnerships between certain operators. and junkets.

MGM China ended 2021 with $389.8 million in positive adjusted real estate results, an improvement from the $1.3 billion in real estate losses recorded the previous year, but growth has slowed in the last three months of the year.

During the group’s conference call to discuss the latest results, Chairman and Chief Executive Bill Hornbuckle stressed that MGM China remained “well positioned for the eventual rebound in the market given its strengths in premium mass” and would focus on the conversion of VIP rooms operated by junket. in internal operations.

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