The Macau Metro Monitor, September 30, 2011
MACAO CASINO OPERATORS HIT BY CHINA FEARS FT
Grand Korea Leisure (GKL), a junket operator based in Seoul and runs Seven Luck casino, has stopped extending credit to mainland Chinese high rollers. GKL, which has a small Macao operation, said the move was temporary and a repeat of a “credit clearing” exercise that saw it halting VIP credit for two months last year. It did not give a specific reason for the latest move.
A junket operator in Macao said he was not aware of rivals experiencing a credit crunch. However, he had heard of mainland Chinese investors pulling capital from their investments because of monetary tightening at home. “There are many wealthy factory owners from the east coast of China who have been making good returns from Macao simply by lending money to junket operators in return for 1-1.5 per cent in monthly interest. They have seen Macao as a profitable sideshow to their real business, which is experiencing a slowdown. However, some of them are in need of cash at home and have trouble borrowing from banks. So they are cashing out from Macao,” he said. So far, this only had a limited impact on the junket operators, he added, as they were still seeing strong growth in business.