Suncity says Macau gaming rooms shut, CEO resigns after arrest – Metro US

Suncity says Macau gaming rooms shut, CEO resigns after arrest

FILE PHOTO: A logo of Macau junket operator Suncity Group
FILE PHOTO: A logo of Macau junket operator Suncity Group is seen at a gaming fair in Macau

HONG KONG (Reuters) -Macau’s Suncity Group Holdings Ltd said gaming rooms operated by a company owned by its former CEO and chairman, Alvin Chau, have been closed.

Chau, who was arrested with 10 others on Sunday over alleged links to cross-border gambling and money laundering, is also the founder of Macau’s biggest junket operator which brings in high rollers to play at casinos.

Suncity Group also confirmed in its statement issued late on Wednesday that Chau had resigned from all positions at the listed company, but did not announce a new CEO or chairman.

In a watershed development for the sector, Macau and mainland Chinese authorities are adopting a zero-tolerance approach to the promotion of gambling in mainland China where it is illegal. In tandem, they are seeking to rein in the flow of Chinese gambling-related funds into Macau and other gaming hubs – outflows that China last year deemed a national security risk.

Chau’s junket operations are estimated to have accounted for a quarter of Macau’s gambling revenues, and the closure of his gaming rooms is expected to exacerbate pain for casino operators in the world’s largest gambling hub that has already been hit hard by the pandemic.

Shares in Wynn Macau have plunged 20% since Chau’s arrest while Sands China and MGM China have both slid 15%, though declines logged on Thursday were much milder than earlier in the week.

Suncity Group, which describes itself as a gambling sector investment company with hotel and other retail assets, has sought to draw a distinction between its businesses and Chau’s junket operations, but analysts see them as inextricably linked.

“Suncity junket was the cash cow, the money-making entity, that supported financially the rest of the group,” said Carlos Lobo, a Macau-based gaming consultant.

He added that the certain demise of Chau’s junket operations following his arrest would lead to closures in other areas of the group such as restaurants, bars and hotels.

Suncity Group said in the statement that its travel-related businesses would be “adversely affected” by the crackdown on Chau’s junket operations.

Its stock was down 5% in Thursday afternoon trade, off a record low marked earlier in the day, after being suspended on Wednesday. The shares have halved in value this week and are now worth HK$847 million ($110 million).

Macau authorities have accused Chau and 10 others of using the former Portuguese colony as a base for an illegal “live web betting platform” in the Philippines that attracted mainland Chinese gamblers.

A warrant for Chau’s arrest has also been issued by the mainland Chinese city of Wenzhou, accusing him of forming an extensive junket agent network that helps citizens engage in gambling activities and of setting up a company that helps gamblers make cross-border fund transfers.

($1 = 7.7914 Hong Kong dollars)

(Reporting by Eduardo Baptista; Additional reporting by Donny Kwok and Marius Zaharia; Editing by Edwina Gibbs)