There have been growing concerns that the Macau junket business is shrinking. New tax rules, tougher competition and more debt has already forced out some of the smaller players, while the others are scrambling to improve their earnings. Analysts with Morgan Stanley Asia Ltd. visited Macau last week and walked away confirming that junket operations in the city aren’t growing as fast for the companies there as they are in other locations.

According to the analysts, those junkets that have targeted mostly Chinese VIP players for the Macau casino market are finding that their overseas markets are growing at a faster rate than what they’re experiencing in Asia’s gambling capital. The two analysts, Praveen Choudhary and Jeremy An, explained, “We met concessionaires, junket operators and 20-plus investors on February 21,” adding, “We found the trip to be mildly positive with longer tail [demand] post-Chinese New Year holidays, upcoming spring dinners for junkets, and higher minimum bets.”

The analysts further stated, “For the junket operators we met, overseas business is growing faster than Macau, but not at the expense of Macau. Growth is mainly coming from the Philippines, Vietnam and Cambodia, while [South] Korea and Australia are not doing so well.”

There have been a number of Macau junket investors that have looked to other regional markets. Several are expected to have operations at NagaWorld in Cambodia this year, including Suncity Group and Guangdong Group. Tak Chun Group, a Macau gambling junket investor, announced earlier this month that it would open a VIP gaming club at NagaWorld sometime this month, as well.