Macau and mainland Chinese authorities are seeking to rein in the flow of Chinese gambling-related funds into gaming hubs, which China last year deemed a national security risk
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.
Macau and mainland Chinese authorities 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).
