Some Macau table players currently qualifying as VIPs could be in for a rude awakening in 2011, an industry insider suggested to Asian Gaming Intelligence this week.
If the Macau market continues the same growth trajectory as 2010 without a significant new supply of live VIP tables, then some of the lower high rollers could effectively be bumped out of the segment and back into the mass market.
“Some of these lower level VIPs will probably get put on the main floor. The operators may not have a choice without a significant increase in VIP capacity coming into the market and the VIP sector growing at the rate it is,” said the source.
In reality and in order to save face for these unfortunate ‘low highs’, a new segment would probably be created for them, along the lines of the junkets found on mass floors in some properties and some jurisdictions in Asia. But just as after the global financial crisis in 2008 many retail banks changed their policies regarding account holder ‘perks’, so it’s likely the Macau players in the new segment would lose some of their existing privileges.
There are already some signs of this with one Macau operator reportedly cancelling a banquet for mid-level VIPs and replacing it with a buffet. According to AGI‘s sources the junket agents acting as middlemen for the players advised the operator it was better to cancel the event than make the players lose face.
By ‘significant new supply’ of tables, AGI means more than the 400 live tables Galaxy Macau—the only new opening of 2011—will have in its first phase due in the first half of this year. We mean more even than the 400 live tables Sands China may add at Cotai 5 and 6 between now and the expiry of the table cap in 2013.
Of course, even in the bullish market conditions of 2010, not every VIP table is utilised every hour of every day. But operators point out that rather than running a VIP operation as if it were a budget airline, filling up every available seat with a paying passenger; what VIPs tend to look for is variety—including the choice to move to another table within the same room if their luck has dried up at their current spot. And given that many junket operators run rooms in several properties, they want to be able to offer players the flexibility of trying different venues. That can only happen if the VIP rooms are running somewhere below capacity.
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