Former Suncity Junket Boss Alvin Chau In Court Sept. 2

The former boss of the Suncity junket group, Alvin Chau, heads to court on September 2, 2022. Chau faces numerous charges of illegal gambling and money laundering. A guilty verdict sees Chau head to prison for a minimum of eight years, although he could face much longer behind bars.

Chinese authorities arrested the Suncity junket boss in November 2021. Police arrested the billionaire in Macau, prompting him to resign from his role as Chief Executive Officer (CEO). Chau’s resignation resulted in the Suncity junket group’s shares plummeting, wiping hundreds of millions off the company’s valuation.

Police arrested ten others in addition to Chau. They, along with Chau, allegedly ran illegal gambling platforms overseas and lured Chinese citizens into gambling. In addition, authorities charge Chau with money laundering. Penalties are severe, with a minimum eight-year jail sentence awaiting guilty parties.

Further arrests mean 20 others join the Suncity junket founder in court on September 2, 2022. Chau has spent the past eight months behind bars at the Coloane Prison.

The Vast Reach of the Suncity Junket Operation

Chau’s arrest ultimately ended junkets in Macau. Once generating massive wealth and seemingly untouchable by authorities, junkets essentially had free reign of Macau. That is no longer the case with all junkets shutting down, or at least not being as brazen as they once were.

The Suncity junket was the largest, most profitable of them all. Court documents reveal the extent of the operation.

Charges suggest Chau’s company facilitated unlawful gambling worth at least HK$800 billion ($1.49 billion) since 2013. Much of that business occurred in Macau, but a significant portion went to Australia, mainly at Star and Crown casinos. The Suncity junket made at least HK$21.5 billion profit ($3.99 billion) profit.

China has strict rules regarding money leaving the country. It states any money leaving mainland China poses a risk to national security, hence severe penalties for facilitating the movement of funds.

Suncity released a statement shortly after Chau’s arrest denying any wrongdoing.

“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.”

Why Is Chau Facing a Lengthy Jail Term?

The sums of money Chau was allegedly involved in are astronomical. Hundreds of millions of dollars have left mainland China, most lost forever. In addition, the clients the Suncity junket sent abroad, mainly to Australia, spend vast sums that could have been spent in Macau. The Macau government estimates it lost HK2.8 billion ($520 million) in gaming tax revenue. The Macau government is not in the business of losing money. Chau has more than enough money to pay back what Macau lost. Repaying that money is not enough on its own. The Macau government will apply severe consequences to prevent anyone from following in Chau’s footsteps.

A court case of this complexity will last several months. Expect a massive, eye-watering fine for the former Suncity junket boss in addition to a jail sentence that is in double figures.

What Are Junkets?

Junkets are businesses that help Chinese gamblers, usually VIPs, gamble in Macau and aboard. They allow gamblers to transfer money overseas, bypassing China’s strict rules on moving currency out of the country.

Enticing Chinese citizens to gamble is illegal in the county. Operators like the Suncity junket disguised gambling trips as legitimate business trips or vacations. They act as a middle man for the gamblers’ finances, earning a pretty commission on all transactions.

Crown Resorts and Star Entertainment fell foul of junkets in their recent and ongoing inquires. Both companies hid gambling transactions from prying eyes by listing them as legitimate hotel costs and services.