Gambling boss Alvin Chau's arrest in Macau plummets casino shares

Alvin Chau, founder and chairman of Suncity Group Holdings Ltd. Photo: David Paul Morris/Bloomberg

Suncity Group Holdings, the embattled gambling group, has shut down all of its VIP gaming rooms in Macau, the world's largest gambling hotspot, according to two sources with firsthand knowledge of the situation.

According to one of the people, the closing of the company's VIP rooms will result in a roughly one-third reduction in the Macau headcount. This senior casino executive requested anonymity since the closure has not been disclosed officially.

Suncity Group did not return a message seeking comment. According to the company, its shares were suspended from trading on Wednesday for the second time in three days, pending the release of an announcement about its VIP business.

The announcement comes amid a wide-ranging investigation into Suncity CEO Alvin Chau, who was arrested on Sunday for his cross-border gambling and money laundering involvement. Mr. Chau is also the founder of Macau's largest junket operator, specializing in bringing high rollers to casinos.

Authorities are taking a zero-tolerance stance on gambling promotion in mainland China, where it is prohibited. They attempt to rein in the flow of Chinese gambling-related funds into Macau and other gaming hotspots — outflows that China has deemed a threat to national security.

Suncity's gaming room closure has increased suffering for Macau-listed casino stocks, which have fallen this week on expectations of a loss of business from Mr. Chau's junket activities, which are believed to account for roughly a quarter of Macau's gaming income.

Wynn Macau's shares, which experts believe are the most reliant on Suncity's gaming rooms, have taken a beating, falling 8pc on Wednesday, bringing this week's losses to 18pc.

Wynn Resorts' parent company in the United States has had a more modest loss, with its shares falling 5% on Monday and Tuesday.

Outside of Macau, Bloomberry Resorts, a popular casino resort in the Philippines for Chinese gamblers, fell 10% on Wednesday.

Mr. Chau and ten others have been charged with using Macau as a base for an unlawful "live web betting platform" in the Philippines that drew mainland Chinese gamblers.

Mr. Chau was also arrested last Friday in the mainland Chinese city of Wenzhou on suspicion of developing a junket agent network that assists citizens in gambling operations and establishing a corporation that helps gamblers with cross-border financial transfers.

Mr. Chau, according to Suncity Group, intended to resign. Reuters has been unable to contact Mr. Chau or his lawyer. Suncity Group's stock fell 48 percent to a record low of HK$880 million (€99.8 million).

Publish : 2021-12-02 12:57:00

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