Operators want more commissions for the high rollers as new casinos open
The gaming junkets that bring high-rolling players to Las Vegas Sands' casino in Macau are pressuring the company to raise the multimillion-dollar commissions it pays them for their services.
In anticipation of increased demand from a string of new casino openings, the main junkets serving the Sands Macau have teamed up to push for an across-the-board commission increase of 0.1 to 0.2 per cent of the casino's VIP chip turnover, according to Richard Lum, a Hong Kong entrepreneur whose firm is working on a partnership deal with a Sands junket.
'The junkets are collectively negotiating with Sands,' Mr Lum said in an interview. His firm Teem Foundation is engineering a $539 million tie-up with Sat Ieng Sociedade Unipessoal, one of Sands' top junkets and responsible for about 40 per cent of VIP turnover at the casino.
Macau accounts for the majority of revenue and profit at Las Vegas Sands and business has soared over the past year on the back of rapid expansion into the enclave's $28 billion high-roller market. Crucial to this success has been the network of independent marketing agents, or junkets, that bring players to the casino, lend money and collect gambling debts.
Sands junkets receive an average commission of about 1.1 per cent of VIP chip turnover, according to Mr Lum. That compares with a traditional base rate of 0.7 per cent in Macau, and equates to about US$40 million based on VIP chip turnover of US$3.7 billion at Sands Macau during the first three months of this year.
In dollar terms, raising the commission to 1.2 or 1.3 per cent would mean an extra quarterly payout to junkets of US$3 million to US$8 million, based on the Sands results for the previous three quarters.