VIP Intro+ Back

(Last updated: April 20, 2016)
 

Most casinos in Macau have VIP rooms that cater to high rollers who routinely bet upwards of $10,000 HKD per hand.  Almost exclusively mainland gamblers, they are usually aligned with a junket operator who lends them money when they are in Macau, and collects and settles all debts when the player returns to China.  In exchange for their business, these high rollers are rewarded with a cash back rebate, usually around 1.1% to 1.25% of their total buy in.  The player will then gamble using promotional chips, also called "dead chips", which cannot be exchanged for cash and can only be used to gamble.  If the player wins a bet, he is paid in normal cash chips.  If he loses a bet, he loses the dead chip.  Once the player is out of dead chips he can use his normal cash chips to buy more dead chips, or he can simply cash them in.        

 

These promotional chip programs are very good for the player, and I would definitely advise you to join one if you can if you can afford the high buy ins, which usually start from $50,000 HKD.  The only game you'll be able to play is Baccarat, and the chart below shows the adjusted house edge for the Banker and Player bet, after taking the cash back rebate into account.

 

 

In addition to private junket operators, every major casino will usually offer their own Promotional Chip program, albeit at a far lower commission, usually under 1%.  (For a list of casino operators and their rates, please click here: VIP Rates.)  Junkets, on the other hand, routinely give over 1.1%, the rub being that they are far less reliable than casinos when it comes time to settle the commission.  Unless you have personal connections within a junket and/or know the right people, I would probably just play it safe and do business with the casinos first.    

 

I'd like to go into a little more detail now about the junket operators and how they work.

 

Junket operators strike deals with casinos to promote VIP rooms, and typically commit themselves to a minimum amount of rolling chip purchases a month, set by the casino.  A casino usually partners with several different junket operators to supply gamblers for different VIP rooms, with all the junket operators in competition with each other.  It's important to remember that the junket operator only supplies the players.  All the gaming is overseen by the casino, which provides the dealers and gaming manager.
 

The junket operators make money in two ways.  They either take a fixed commission, an agreed percentage of rolling chip turnover, capped at 1.25 percent, or they accept an agreed percentage of the winnings in the VIP gaming room, which means they’re also on the hook for the same percentage of losses should the VIP room lose money. 
 

The VIP gaming sector in Macau has taken a beaten the past 28 months as high rollers from the mainland shun Macau for safer havens overseas, most notably, Australia and Singapore.  Xi Jin Ping's crackdown on corruption resulted in a 42.1% YOY drop in VIP revenue through the first quarter of 2015, as earnings plummeted from 8.2 billion US dollars to 4.72 billion.  The downward spirial only intensified in 2016, when revenues maxed out at a meagre 3.8 billion dollars over the first three months of the year, a further decrease of 19.35% YOY.  As a result, many casinos have shifted focus to the premium mass market, and perhaps most damningly, two of the city's newest casinos (Broadway Macau and Studio City) didn't even bother to open VIP rooms.

 

As VIP revenue dwindles, so too does the amount of licenced junkets and VIP rooms.  Official data shows that there are 141 licensed VIP companies in Macau as of January 2016, down from 235 in January 2013.  VIP rooms are also on the decline, down from their peak of 214 two years ago to 140 now.  The VIP industry is obviously very much in transition and facing an uncertain future.  It's impossible to say now if they'll ever reach the heights they achieved in 2013, when VIP revenues accounted for 29.87 billion dollars, or just over 64% of all gambling earnings city wide.  To show how far things have fallen, total gambling revenues for VIP and mass gaming combined didn't even reach 30 billion dollars in 2015.

 

Now for more information on VIP rates and other comps, please click the link here: VIP Rates.