Suncity closes VIP arcades in Macau after CEO arrest – sources

HONG KONG, Dec. 1 (Reuters) – Distressed gambling group Suncity Group Holdings (1383.HK) has closed all of its VIP gambling halls in Macau, the world’s largest gambling hub, after the arrest of the company’s CEO, two sources with direct knowledge of the situation told Reuters.

The closure of the company’s VIP rooms will lead to a reduction of about a third of its workforce in Macau, said one of the sources, a senior casino official who declined to be identified because the closure was not publicly announced.

Suncity Group did not respond to a request for comment. Her shares were suspended from trading on Wednesday, the second time in three days, pending what she said was the release of an announcement related to her VIP business.

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On Wednesday evening, Suncity Group said in a statement that CEO Alvin Chau had resigned from all of his positions at the company. The statement also said the company asked the Hong Kong Stock Exchange to resume operations on Thursday.

The news comes amid a wide-ranging investigation into Chau, who was arrested on Sunday for alleged links to cross-border gambling and money laundering. Chau is also the founder of Macau’s largest junket operator, which brings in big players to play in casinos. Read more

Reuters’ efforts to contact Chau or his lawyer were unsuccessful. Suncity Group shares plunged 48% on Tuesday to a record low, valuing it at 880 million Hong Kong dollars ($ 113 million).

Marking a turning point for the industry, authorities are taking a zero-tolerance approach to promoting gambling in mainland China where it is illegal and seeking to curb the flow of Chinese gambling-related funds to Macau and other gambling centers – exits that China viewed last year as a national security risk.

The closure of Suncity’s gambling halls only exacerbated the pain for shares of Macau listed casinos which fell this week due to the expected loss of activity in Chau’s junket business, which is expected to fall. account for about a quarter of Macau’s gaming revenue.

Shares of Wynn Macau Ltd (1128.HK), which analysts say is Suncity’s most dependent casino operator for gambling halls, were particularly hard hit, slipping 8% on Wednesday to carry losses in this week at 18%.

Declines at US parent company Wynn Resorts Ltd (WYNN.O) were more subdued, as its shares were down 5% from Monday and Tuesday.

A logo of Macau’s junket operator Suncity Group is seen at a gaming fair in Macau, China on November 18, 2015. REUTERS / Bobby Yip / File Photo

Outside Macau, Bloomberry Resorts Corp (BLOOM.PS), a popular casino destination for Chinese gamblers in the Philippines, fell 10% on Wednesday.

Authorities in Macau have accused Chau and 10 others of using the former Portuguese colony as the base for an illegal “live online betting platform” in the Philippines that has attracted players from mainland China.

An arrest warrant for Chau was also issued Friday by the city of Wenzhou in mainland China, accusing him of forming a network of junket agents who help citizens engage in gambling activities and create a company that helps players make cross-border money transfers.

“The writing was already on the wall. But nothing was done in Macau until the Wenzhou police spoke about it,” the executive said.

Although Chau’s junket operations, also known as Suncity, are not part of the Suncity listed group, they have already been singled out by mainland Chinese state media, which said they were harming the social order of China. China.

A 2019 article from the Economic Information Daily, a unit of China’s state-owned Xinhua News Agency, alleged that the annual amount of online betting on websites operated by Suncity was over $ 1,000 billion. yuan ($ 155 billion). Suncity also did not respond to a request for comment on this estimate.

One of the sources told Reuters that Suncity operates VIP rooms at properties owned by six licensed Macau casino operators – Wynn Macau, Sands China (1928.HK), MGM China (2282.HK), SJM Holdings ( 0880.HK), Melco Resorts and Galaxy Entertainment (0027.HK).

In 2019, Suncity operated up to 17 VIP arcades in Macau and accounted for almost half of the gaming hub’s VIP market, the executive added.

Melco Resorts said in an email to Reuters that Suncity has ceased operations at its City of Dreams and Studio City resorts.

Wynn said in a statement that the Suncity junket rooms at Wynn Macau and Wynn Palace had suspended operations at midnight on December 1.

The other four casino operators did not respond to requests for comment.

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Reporting by Farah Master and Eduardo Baptista; Additional reporting by Donny Kwok, Anne Marie Roantree and Twinnie Siu; Editing by Edwina Gibbs and David Evans

Our standards: Thomson Reuters Trust Principles.

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