Macau’s biggest junket operator Suncity Group will open its own US$4-billion casino-integrated resort in Vietnam by year’s end, Bloomberg reported.
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About 70% of the initial revenue is expected to come from VIP gamblers, but Suncity is confident Vietnam’s economy is strong enough to bring in more mass gamblers.
So far, Suncity and its partners have invested more than US$1 billion in the project, which is expected to take 13 years to complete.
Suncity said more than 30% of the group’s revenue now comes from markets outside Macau, compared with 10% five years ago.
The overseas push comes as Suncity expects that its betting volume will drop by 10% to 15% in Macau in the second half of the year, as tensions from the US-China trade war and stricter industry regulations damp VIP sentiment.
Suncity’s urgency to diversify beyond Macau is the latest indication that a major shift is taking place in the gaming hub and challenging its prospects for growth. A sluggish Chinese economy and stricter regulations, including a smoking ban in casinos, have been keeping high-end customers away from the baccarat tables.
The emergence of regional gaming spots across Asia is offering an attractive alternative to Chinese high rollers, who increasingly feel more comfortable further away from Beijing.
Overall casino revenue at the world’s largest gaming hub slumped 8.3% in April, the most in almost three years, with the VIP segment sinking 23% from a year earlier.
Union Gaming analysts Grant Govertsen and John DeCree said in a note on May 20 that there is a growing realization that Macau VIP play is bleeding to regional markets, with Cambodia and Vietnam being the primary beneficiaries.
While it’s typical for high rollers to try out regional resorts and eventually return to Macau, analysts said “this time is different.” The regional properties have improved in quality, and infrastructural expansion has made them easier to reach, they wrote, noting that junket operators are sending a steady stream of Macau players to these locations.
