The arrest of the ‘alcohol tycoon’ in Macau rattled the world’s largest gambling center

FILE PHOTO: A logo of Macau junket operator Suncity Group is seen at a game fair in Macau
FILE PHOTO: A logo of Macau junket operator Suncity Group is seen at a game fair in Macau, China November 18, 2015. REUTERS / Bobby Yip / File Photo

November 30, 2021

By Eduardo Baptista

HONG KONG (Reuters) – The arrest of the Macau “gambling tycoon” is expected to shrink business in the world’s largest gambling hub, with authorities in China intent on cracking down on what they see as the flow of dangerous money from the mainland.

Alvin Chau, CEO of gambling conglomerate Suncity Group Holdings Ltd, is the founder of Macau’s largest betting operator – outfits that bring high numbers to play at casinos.

He was arrested by Macau authorities on Sunday for allegedly being involved in cross-border gambling. A warrant for his arrest has also been issued in China.

Analysts say his arrest heralds a new era of zero tolerance for the promotion of gambling in China, where all forms of gambling are illegal.

It also deals a blow to the junket industry, which will further erode Macau’s reliance on high rollers and accelerate its shift to the mass market.

The crackdown on Suncity has had a direct impact on casino marketers, who promote gambling in Macau to customers in mainland China.

Ben Lee, founder of gaming consulting firm IGamiX in Macau, said: “Then they now know that arranging players to come to Macau, promotes gambling in China, even if it is one phone calls in China, could put them in a hot pot.

Bloomberg News reported on Tuesday that Suncity Group will close all of its VIP gaming rooms in Macau casinos as of December 1 and stop paying salaries to at least a third of its employees in Macau. Suncity did not respond to Reuters’ request for comment.

According to IGamiX’s Lee, any shutdown would harm Macau’s thriving economy.

“Losing thousands of jobs will be a big problem for Macau,” he said.

Cross-border money flows from gambling have long irked the Chinese government, and Macau authorities say their investigation has been ongoing for two years.

Carlos Lobo, a gambling consultant based in Macau, said the crackdown – which comes amid widespread regulatory efforts by Beijing to rein in a range of sectors – was only a matter of time later. when China ruled last July that cross-border capital flows from gambling were a national security risk.

Miao Shengming, an official with China’s public prosecutor’s office, said at a news conference on Monday that some overseas casinos and online gambling sites mainly target mainland customers, causing harm harming China’s “economic security”.


By some estimates, Chau’s video game business accounts for about a quarter of gaming revenue in the city known as Asia’s Las Vegas.

The damage to them has further reduced the income of casino operators, which have been reeling since the outbreak of the pandemic as China’s quarantine requirements have driven most mainland tourists to Macau too much. costly.

Macau posted gambling revenue of 4.4 billion patacas ($550 million) in October, down 40% from a year earlier.

The Macau-listed units of US casino operators have plunged over the past two days, with shares of MGM China down 15%, Wynn Macau down 11% and Sands China down 9%.

Macau authorities accuse Chau and 10 others of using the former Portuguese colony as the basis for an illegal “online betting platform” in the Philippines that attracts mainland Chinese.

Authorities in the eastern Chinese city of Wenzhou have accused Chau alone of forming a network of junket dealers to help citizens engage in overseas and cross-border gambling activities, and become a successful player. start a company that helps gamblers transfer money across borders.

Suncity Group – which has interests in gambling but does not include Chau’s betting business – said Chau, who is both CEO and chairman, had intended to step down.

Its shares fell 48% on Tuesday, to a record low following a suspension of trading a day earlier, valuing it at HKD880 million ($113 million). Suncity said its operations will not be affected in the event that Chau’s support is no longer available.

Part of the investigation in Macau involves the Russian resort of Tigre de Cristal, near China’s northeastern border and controlled by Summit Ascent Holdings, which considers Suncity a controlling shareholder. Shares of Summit Ascent fell 63%.

Suncity Group said media allegations that Tigre de Cristal engaged in cross-border gaming because it solicited customers in mainland China were untrue.

Chau could not be reached for comment. Junkt operator Suncity did not respond to Reuters’ request for comment.

(1 dollar = 6.3717 Chinese yuan)

(1 dollar = 7.7995 Hong Kong dollars)

($1 = 8,330 patacas)

(Reporting by Eduardo Baptista; Additional reporting by Anne Marie Roantree and Donny Kwok; Editing by Edwina Gibbs and Angus MacSwan) The arrest of the ‘alcohol tycoon’ in Macau rattled the world’s largest gambling center

Bobby Allyn

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