On the heels of Neptune Guangdong Group denying media reports yesterday that they plan to idle as many as 300 workers, the David Group has informed the local Macau Business Daily that they also “[have] no such plans” to close VIP rooms at the end of the month as previously reported.
Earlier in the week, Lei Kuok Keong, Vice President of local gaming union Forefront of Macau Gaming (FMG) reportedly told Business Daily that David Group would close two of its four remaining VIP rooms in Macau and that Neptune Guangdong Group would fire 300 workers.
Both companies have subsequently denied the assertions and Neptune published an announcement in the Macao Daily newspaper yesterday stating that they are experiencing normal turnover for a company their size – noting numbers of 100-200 workers resigning or being laid off this year which is in line with other years.
According to several media reports the Neptune Guangdong Group reserves its legal rights in regard to libel.
The David Group currently runs four VIP rooms, having closed three earlier this year. All Macau operators, especially junket providers, have experienced a dramatic downturn in business with the loss of VIP gamblers from the Mainland. Whereas the six casino concessionaires have been able to hedge their losses somewhat via mass market gamblers, the junket operators have no such luxury – depending entirely on high rollers for their revenues.
Upon announcing the closure of three rooms in January, Frank Ng, David Group’s director of corporate communications told Bloomberg, “We’re adjusting our business strategy; this is a general trend in the industry,” the director said. “We’re hibernating. Once we wake up, we can restart.” As market conditions improve the rooms can reopen.
The business of junket operators is to provide credit and arrange trips to luxury private gaming venues for VIP gamblers. In 2014 those high rollers accounted for about 60% of the $44 billion in revenue that Macau casinos generated.
Since the mainland Chinese crackdown on graft began to set Macau’s gaming revenue into a tailspin, many operators including David Group, Suncity, Iao Kun, and Hengsheng Group have branched out to other areas including the Philippines, Vietnam, South Korea, and Australia to entertain their wealthy customers.