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Junkets transitioning markets

Seeking opportunities abroad to become casino owners rather than contractors only is an increasing trend among junket operators, says analyst

The size of the gaming market in the Philippines is still “much bigger than Vietnam,” having been estimated at some US$2.9 billion, says Grant Govertsen, managing director and head of Asia Equity Research at Union Gaming Securities Asia.
Union Gaming estimates that gross gaming revenue in Vietnam currently stands at US$800 million to US$1.2 billion – the Vietnamese Government does not publish data on GGR – in a research note published this week.
Until recently, Vietnam was a foreign-only gaming jurisdiction.
The first regulation enabling access to some of the country’s 30 casinos and electronic gaming parlours by Vietnamese citizens was enacted as a trial scheme in March of this year.
Suncity Group Holdings Limited, a Macau-based and Hong Kong-listed junket operator, is one of the latest companies to have announced new investment plans in the country.
By the end-June, Suncity had entered into a memorandum of understanding to acquire Star Admiral Limited, a company which owns a 34 per cent equity interest in an integrated resort (IR) in Hoi An, Vietnam.
The company noted at the time that the project ‘represents a prime opportunity for the group to strengthen its presence and to further extend its business in Vietnam.’
In response to Business Daily enquiries, Govertsen said: “VIP junkets of all sizes are becoming increasingly interested in transitioning from an agency model to a principal model . . . In other words, they see greater economic opportunities for themselves as casino owners rather than as contractors within existing casinos.”
According to him, the trend observed in Vietnam might also be replicated across multiple gaming jurisdictions over the coming years.
“Given that there are limited opportunities within Macau to accomplish this transition, it makes sense that VIP junkets are exploring opportunities overseas,” he concluded.