The fight over VIP gamblers in Asia is heating up. As more casinos come online throughout the region, junket operators are more than willing to go where the money is. Wynn Macau has noticed that its collection of contacts driving traffic to its venues is fallen and is prepared to do something about it. For the first time in 14 years, the Asian casino arm of Wynn Resorts is going to give casino junkets a raise.
Most employees, a category to which junkets could loosely be attributed, would never wait 14 years to see their pay get a boost, and there’s little doubt that Wynn has made the decision out of a belief that an increase was in order. Instead, it comes down to sheer economics. Forbes points out, thanks to a report by analysts with Trefis, that Macau’s VIP segment contributes 40% of the company’s overall casino revenues. That’s a huge chunk that should be rewarded for its efforts.
As of March 1, Wynn is going to give junkets a commission of 42.5%, up from the previous 40%. This should put it in line with what other casino operators offer and allow Wynn to be more competitive in the shrinking junket market.
It took a massive hit in its junket share for Wynn to make the move. The company’s rolling share, according to analysts with Credit Suisse, went from 23% in the first quarter of 2019 to 20% by the end of the year. It continued to fall as the new year rolled around, dropping to as low as 16% last month. The analysts point to the obvious and basic business premise, explaining, “As volume shrinks, junkets will naturally allocate business to operators offering higher commission.”