Considering shutting down its Macau operations and focusing on other business interests.
Casinos in Macau are estimated to earn more than 50 percent of total gaming revenue from VIP customers in mainland China. Junket operators played an important role in targeting these high-stakes gamblers and bringing them to casinos in Macau. Junket operators and casinos in Macau formed a partnership that proved to be mutually beneficial and very profitable until the Chinese government decided to crack down on these VIP gamblers.
When Beijing launched its anti-corruption drive in 2014, many believed it would be short-term. Beijing has been persistent for the past 18 months, scaring away VIP gamblers in the process. As a result, junket operators struggled to attract a steady influx of VIP gamblers from the mainland, and casinos in Macau faced a significant drop in gaming revenue.
Neptune Group reported a loss of more than $103 million for the fiscal year ended June 30, 2015, and the company said it was exploring other business opportunities, such as securities investments and loans, to diversify its business profits and improve returns.
In a statement published in the Asian Games Brief, the company said, “If this situation does not correct itself in the coming years, the group may no longer firmly continue its presence in the Macau VIP games industry. Currently, management is facing urgent concerns to prevent a drop in revenue as they scramble to maintain a healthy cash flow to seek low turnover and other business opportunities. But as economic instability intensifies over the past six months in China, which has reached its peak in global market turmoil, we are forcing a broad rethink of our business strategy, and we are planning our profits around China’s rise in other Asian countries.”
The junket operator has partnered with Sands Macao, Grand Lisboa and Venetian Macao to run VIP rooms. Neptune recorded a total loss of 33% in 2015 compared to the same period in 2014. The company will make a final decision on Macau’s operations after several more months of confirmation of changes in Macau’s.