Casinos from South Korea to Australia are going all-out to woo the Chinese gamblers scared away from Macau by Beijing’s anti-graft crackdown
At the oceanfront Ramada Plaza hotel on South Korea’s Jeju island, about 100 Chinese gamblers huddle around felt-topped tables, wagering as much as five million won (HK$35,000) at baccarat. Shouts in Putonghua – “Beautiful!”, “Good!” – ring out as bettors with winning hands slam their cards on the green table-tops, reports South China Morning Post.
Asian casino operators from Korea to Australia are pulling in China’s gamblers as the country’s corruption crackdown scares many away from Macau, the world’s biggest gambling hub. They are capitalising on a downturn in the city’s gaming industry, which last month suffered its worst drop ever.
Operators such as Paradise Co in Korea are hiring Putonghua-speaking staff and offering VIP treatment including free flights, limousines and hotel stays to big spenders.
Echo Entertainment Group of Sydney and NagaCorp in Cambodia cater to the junket operators who organise trips for Chinese gamblers with perks such as higher commissions, lower taxes and private jets.
“Premium mass players can be recognised as VIP players and treated better than in Macau,” said Lee Hyuk-byung, a vice-chairman of Paradise. “And we have other attractions in Korea such as culture, fashion, food.”
Macau casino revenue fell last year for the first time and may decline 8 per cent this year, according to analysts. By contrast, Korea and the Philippines would grow 16 per cent and 33 per cent, respectively, this year, gaining from the spillover of Chinese gamblers, Deutsche Bank analyst Karen Tang wrote.
“The anti-corruption measures are discouraging some people from travelling to Macau, and as a result, we are seeing a slight shift in travel from Macau to other destinations,” said Aaron Fischer, an analyst at CLSA. “Vietnam and the Philippines will likely benefit as they are the closest. Korea will pick up people in the northern parts of China.”
Gamblers who bet at least US$50,000 at Paradise’s casinos would qualify for freebies usually available only to VIP players, Lee said. In Macau, the minimum needed to get similar perks from junket operators is about US$500,000, according to CLSA data.
The company also drew Chinese gamblers to the celebrity-obsessed country by touting its pop culture and offering recommendations of top Korean plastic surgeons, Lee said.
Operators have more risqué offerings, too. A gambler who exchanges chips worth 300,000 yuan (HK$371,000) can receive free flights to Jeju, tours with a Putonghua-speaking guide, and the companionship of a “third-tier” Korean actress or model, according to a brochure from Shanghai-based tour operator CNS.
It was illegal for foreign companies to advertise casino operations in China and Paradise avoided public solicitations, Lee said. Its staff reached out to high-stakes gamblers recommended by customers and made frequent trips to major Chinese cities including Beijing and Shanghai.
Companies were able to sidestep China’s ban on casino marketing by advertising non-gaming aspects such as a concert or entertainment show held on its venue, said Grant Govertsen, an analyst at Union Gaming Group in Macau.
“Junket operators own restaurants, nightclubs. They sponsor golf tournaments and other getaways,” Govertsen said. “There is plenty of stuff a junket could advertise in a mass-market sort of format.”
Manila’s members-only Signature Club in Melco Crown Entertainment’s City of Dreams casino has entrance signs in English and Chinese, while Putonghua-speaking staff direct guests to cashiers, shops and restaurants. The neighbouring Solaire Resort and Casino owned by Bloomberry Resorts Corp has suckling pig and Peking duck on the menu, catering to Chinese palates.
“There are a lot of excuses to go the Philippines. We always promote the Philippines not on the casino but the whole package,” said Cristino Naguiat, the chairman at gaming regular Philippine Amusement & Gaming Corp. “Even with the crackdown in China, we still had higher volume in terms of gross gaming revenue and in terms of junket and VIPs.”
As Chinese gamblers became more important, there was a need to better regulate the growth of the junket operators that brought them, said Seo Won-Seok, a hotel and tourism management professor at Kyunghee University in Seoul.