People have been protesting outside the Wynn casino Macau
It's just another sign of how the richest gamblers are getting squeezed out of Macau, and the world's largest gambling hub.
The company, Dore Entertainment, was a victim of one of the biggest casino heists in the last few years. About $38 million was stolen from the company in September, but that's not all that's eating the industry.
For over a year the Chinese government has been cracking down on the casino business on the territory. The government has stepped up the monitoring of debit cards in the territory, placed cameras in VIP rooms, limited the number of tables allotted to new projects, and scared off high-rollers concerned with getting ensnared in Chinese President Xi Jinping's wide-reaching anti-corruption drive.
Consider it a place where changes in China's mainland are highly concentrated: As China's economy has slowed, Macau has only suffered more. Macau's November gaming revenue is down 32% from this time last year and 18% from October, according to government figures.
"Our preliminary checks on the ground suggest December is off to a slow start," wrote Wells Fargo analyst Cameron McKnight in a recent note. "This comes despite new supply growth, including the late October opening of MPEL's (Melco Crown's) Studio City as we're hearing foot traffic at the new property is tracking lower than expected."
No segment has suffered like the high-roller segment. For years it was funding by financing companies like Dore called junkets. They pooled investor money promising returns of 1-2% and then gave that money to VIP gamblers so they could lever up their bets.
But now, as Bloomberg reports, junket operators are having problems collecting on their debts. Kwok Chi-chung, president of Macau's Association of Gaming & Entertainment Promoters says junkets are only getting back 20%-30% of their debts.
From Bloomberg's Daniela Wei and Annie Lee:
"Getting the money back is a bigger challenge now for junkets than before,'' Kwok, 60, said in a Nov. 23 interview from his 15th-floor office in Macau, which offers unblocked views of the city's casinos. "With a longer payback period, junkets have less money to lend to new customers, and the business size is shrinking accordingly."
In 2014, 16% of the junkets in Macau closed their doors.
"Almost half the business of VIP is gone and may be shrinking ... it has caused us to review our credit policies and relationships with junket operators," Wynn Entertainment CEO Steve Wynn said on his company's third quarter conference call back in October.
Of the full-on industry rout in Macau he also said that that in his "45 years of experience," he'd "never seen anything like this before."