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      Junket Operation: Macao’s Growing Pains or Stimulants?

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      The Journal of Gambling Business and Economics

      University of Buckingham Press

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          Abstract

          Two serious junket incidents happened in Macao in 2014 and 2015 which led to the significant drop in gross gaming revenue lasting for 27 consecutive months. In this paper, we investigate the importance of junket operation towards gaming companies’ financial performance and the interaction between the performance of corporate governance and junket operation. This study uses regression analysis to examine the relationships among corporate governance, financial performance, and junket promoters in Macao’s gaming tourism industry as well as the differences between those relationships under different economic conditions. The resultsreflect that when economy is booming, the corporate governance performance of gaming operators shows a decreasing trend. Under the control of corporate governance, the gaming operators tend to cooperate with junket promoters in a positive manner. In contrast, the junket operation brings negative impact on casino incomewithout the interaction of corporate governance, especially during booming economic periods. The result is aligned with the actual commission percentage over casino revenue, corporate governance score, and EPS of gaming operators. In a gaming sector, the junket operation towards casino profit and its interaction with corporate governance still overlooked in the academic study. This study not only fills in the research gap, but also provides constructive suggestions for Macao government to optimize the gaming inspection system and the rules on junket operations.

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          Author and article information

          Journal
          The Journal of Gambling Business and Economics
          jgbe
          University of Buckingham Press
          1751-8008
          1751-7990
          September 15 2020
          September 15 2020
          : 13
          : 1
          : 23-42
          Article
          10.5750/jgbe.v13i1.1761
          © 2020

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