The once thriving casino industry in Macau has suffered its 18th consecutive month of declining revenue and one of the main reasons for this decline is attributed to the drop in VIP customers from Mainland China.

Chinese President Xi Jinping’s anti-corruption crackdown has succeeded in scaring away these VIP clientele and in turn severely impacted junket operators in Macau. These junket operators specialized in bringing over VIP clientele from Mainland China and would then lend these VIP gamblers huge amounts of money which were financed by investors who were happy with the returns that their investment brought them.

The collapse of Macau’s VIP market segment has severely impacted the junket industry in Macau and 16 percent of junket operators shutdown operations in 2014 and that number is expected to rise in 2015. To make matters worse, junket operators are now finding it very difficult to collect outstanding debts from their VIP clientele and this has caused investors to get more upset with every passing month.

Dore Entertainment, one of the junkets that operated within the Wynn Macau reported in September that $38 million was stolen by one of its employees and is looking to work with Macau’s authorities to recover the money. A group of investors have continued to hold regular protests outside the Wynn Macau casino protesting over the fact that these junket operators have yet to return their funds.

Junket operators in Macau are currently getting back only 20 to 30 percent of their outstanding loans and since investors are not willing to lend like before, they are faced with a financial crunch. The junket operators have very little money to loan to the few VIP gamblers who still visit Macau and the size of their business continues to drop each month.

The CEO of Wynn Entertainment Steve Wynn said during the company’s third quarter call that he had never witnessed a market slump in his 45 years of experience. In a statement, Steve Wynn said “Almost half the business of VIP is gone and may be shrinking, it has caused us to review our credit policies and relationships with junket operators.”

Macau’s investors will continue to struggle to recover their outstanding loans because it is highly unlikely that the VIP market in Macau will recover. The government continues to monitor debit card transactions, use CCTV within VIP rooms and restricted the number of tables that can operate within VIP rooms. Macau’s gross gaming revenue has declined by 32 percent in 2015 when compared to the gross gaming revenue generated in 2014.

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