Suncity Junket CEO Alvin Chau Arrested

Chinese police arrested billionaire businessman and CEO of Suncity Group junket Alvin Chau and charged him with various gambling offences.

Businessman Alvin Chau is in jail after Macau authorities arrested him over the weekend. Chau later stood down from his role of Chief Executive Officer (CEO) of Suncity Group, Macau’s largest junket operator.

Wenzhou Public Security Bureau in China announced the arrests of 11 people, including a 47-year-old man surnamed Chau. The arrests follow a long-term investigation based on intelligence received in August 2019.

The intelligence suggests Chau used his VIP junket business to run illegal gambling platforms overseas. Furthermore, Chau stands accused of luring mainland Chinese citizens into gambling, an illegal practice. All 11 arrested people face additional charges of money laundering.

Police seized computers, mobile phones, storage drives, and three million patacas (approx. $525,000). The 11 arrested people admitted to establishing overseas gambling platforms but denied money laundering charges.

Chau Arrest Sends GamblingShares Spiralling

Any company that has negativity surrounding its CEO expects its share price to suffer. Suncity’s shares plummeted following news of Chau heading to Coloane Prison. Astronomical losses resulted in the Hong Kong Stock Exchange suspending trading in Suncity shares.

The arrest of Chau sent other Macau casinos’ shares tumbling. MGM China Holdings Ltd fell 10% while Wynn Macau Ltd dropped 7.8%. Both Sands China Ltd and Galaxy Entertainment Group’s shares closed 5% lower. Billions of dollars is wiped from the companies’ valuations.

Chau founded Suncity in 2007 and grew the enterprise into what it is today. The billionaire personally finances Suncity’s projects, including the US$1 billion casino resort Westside City Resorts World in Manila. His arrest and subsequent resignation came with a stark warning to investors.

Chau Stands Down as CEO; Warning Issued

Suncity issued a securities filing informing investors of Chau’s decision to step down as CEO. In addition, the company warned investors Suncity could suffer financial problems.

“As informed by Mr. Chau, he has indicated his intention to resign from the posts of the Chairman of the Board and an executive Director of the Company. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares.”

“The Group is dependent on the financial support from Mr. Chau and his related companies. In the event that the Group looses the support of Mr. Chau for whatever reason, the financial position, business, and operation of the Group will be adversely affected.”

Suncity wasted no time in closing its high roller VIP rooms in Macau casinos. In addition, from December 1, Suncity is ceasing salary payments for at least one-third of its Macau staff.

Junket Group Denies Any Wrongdoing

Chau is behind bars but Suncity denied any wrongdoing. It not only denied the claims made against it, but claimed authorities are extorting the company.

“Suncity has been subjected to extortion. People who were involved in this attempted extortion fabricated and calumniated the Company on the internet, leading the Company to reputational damages. With its significant impact and seriousness, the Company reported the extortion effort to Macau law enforcement. The Company strongly condemns the related group of people and reserves the right to take necessary legal action.”

Australian Casinos Not Using Junkets

The Suncity name is one familiar with anyone following Australian casino news over the past 18 months. They hit the headlines for the wrong reasons when junket became a household term after the royal commission into Crown Resorts mentioned them.

The royal commission accused Crown of turning a blind eye to junkets’ dodgy dealings. These included moving vast sums of money around and turning a blind eye to obvious money laundering.

Crown Melbourne ceased activity with junkets in November 2020. However, Crown only issued a temporary cessation until it decided to issue a permanent ban. Crown Perth permanently banned junkets in late February 2021.

Star Entertainment admitted to collaborating with junkets in August 2020. This despite the then-ongoing investigation into Crown’s affairs. Star’s Chief Casino Officer, Greg Hawkins, gave a flippant comment when asked about links between organised crime and junkets. “Certainly, none of it has been forwarded to me that would change our association with the junket at this point.”