Macau Casinos Say Suncity Junkets Still Operating

Posted on: November 26, 2021, 03:10h. 

Last updated on: November 26, 2021, 04:14h.

Macau casinos that do business with Suncity Gaming Promotion Company — the junket empire of Chinese billionaire Alvin Chau — say their VIP rooms run by the trip organizer continue to operate. That news comes despite a mainland city seeking the immediate arrest of Chau.

Macau Casinos Say Suncity Junket Operations Continuing Despite Alvin Chau Arrest Warrant
Suncity Group founder Alvin Chau, seen to the left above, is a wanted man in mainland China. Authorities in Wenzhou allege that his Suncity junket operation that caters to Chinese high rollers and transports them to Macau to gamble is an illegal enterprise. (Image: Reuters)

Prosecutors in Wenzhou city in the Zhejiang Province shocked the world’s richest gaming hub today by activating a warrant for Chau’s arrest. The Wenzhou Public Security Bureau detailed in a lengthy statement the numerous allegations of illegal cross-border gambling charges levied against the man who is, today, one of the biggest casino tycoons in all of Asia.

[Suncity] causes severe damage to the social order of the country,” a statement from Wenzhou’s public security department declared. “[The] cross-border gambling criminal group, headed by criminal suspect Alvin Chau and including Zhang Ningning and others as core members, is suspected of committing the crime of opening casinos in China, and the acts are of an aggravated nature.”

Wenzhou prosecutors said Ningning has already been detained and the city is moving forward with his prosecution.

Inside Asian Gaming said it spoke with a number of casinos in Macau on condition of anonymity. Each reported that Suncity’s VIP operations inside their resorts carried on without interruption as the Chau arrest warrant was made public.

Prosecutors Detail Allegations

Wenzhou officials contend that Alvin Chau and his Suncity junket group violated its provincial laws, as well as mainland China’s governing rules that ban nearly all forms of gambling.

“[Chau] set up an asset management company within mainland China for servicing gamblers that allows them to exchange their assets for gambling chips that can be used inside Macau’s casinos,” prosecutors argued.

The affidavit adds that the Suncity asset exchange employed a large network of associates who were responsible for collecting debts from clients. Those who couldn’t pay up, the legal complaint adds, were offered loan services from underground banking networks.

Wenzhou believes the Suncity operation consisted of 199 shareholders, with Chau maintaining majority control. It also has approximately 12,000 junket agents that dealt directly with the company’s Rolodex of clients, which number more than 80,000 strong.

Along with his Macau business, Chau’s gaming group has a controlling stake in Tigre de Cristal in Russia’s Far East and is readying to begin the construction of a massive integrated resort casino in Manila.

Potential Impact

Wenzhou’s government is requesting Chau “surrender as soon as possible” to face the allegations. The city says if he does, he will receive a more lenient punishment than he will if he continues to evade arrest.

The Chau news is a major development, as Macau continues to review its regulations that oversee and govern the industry that won $45 billion from gamblers in 2013 alone.

China President Xi Jinping has since instructed law agencies to crack down on VIP junket groups. Those groups led to gross gaming revenue (GGR) dropping to $27.9 billion just three years later in 2016. But gaming was on the rebound prior to the pandemic, with the 2019 casino win in Macau totaling more than $36.4 billion.

Macau’s Gaming Inspection and Coordination Bureau say there are currently 85 licensed junket groups in the region. While that’s a steep decline from the hundreds of VIP travel organizers in business just a few years ago, the companies remain critical avenues to keeping Macau’s multibillion-dollar casinos bustling with big spenders.

Macau’s six licensed casino operators are set to see their concessions expire in June of 2022, though an extension is likely because of impacts caused by COVID-19.

Regardless, the next operating environment for the region’s casinos is expected to be under stricter governing rules. Being one of the largest junket moguls in Macau over the past decade, Chau’s arrest warrant could further jeopardize the legality of junket groups and how they might operate in the next regulatory regime.

EXPLAINED: Macau Junkets

Junket operators sometimes referred to as VIP promoters, act as facilitators for Macau casinos. The junkets guarantee casinos substantial gaming revenue from China’s wealthiest gamblers, and lure in those clients with free first-class travel and accommodations to the Cotai Strip and elsewhere in Macau.

In exchange, Macau’s six casino operators provide gaming rooms, table game dealers, chips, and a monthly commission to the junkets.