With Alvin Chau’s official resignation from Hong Kong-listed Suncity Group, Macau’s VIP junket business has almost reached on the verge of its end as a junket operator. Just days after being taken into custody in Macau on allegations of conducting illegal cross-border gaming operations throughout China, Chau announced he would resign as chairman as well as executive director of Suncity Group. He officially resigned on December 1, 2021.
Confirming the 47-year-old junket operator’s official departure, Suncity said in a statement that his stepping down as boss would be in the best interests of the group. The group added that the departure would also allow him to better focus on legal allegations/complaints against him. In a filing with the Hong Kong Stock Exchange (HKSE), the group also confirmed that it has closed all of its VIP rooms inside Macau-based casinos.
Last week, city prosecutors in Wenzhou announced that an arrest warrant for Chau was issued following a deep probe into his controversial business dealings. Chau, a born and raised citizen of the Special Administrative Region (SAR) of China, has been slapped with a number of charges including the one in which he has been accused of promoting gambling in mainland China. Chau’s fully-owned Sun City Gaming Promotion Co. Ltd. markets luxurious trips, five-star travel, accommodations, entertainment and dining, but it has been barred from marketing casino gambling.
It may be noted here that casino gambling is totally banned in China; while the Chinese SAR of Macau is the world’s leading casino hub and its junket industry’s biggest name is Alvin Chau. His arrest sent a clear signal that Macau and mainland Chinese authorities are in no mood to spare anyone trying to promote gambling in the mainland.
Following Chau’s arrest, Asian gaming analysts at JPMorgan predicted that the days for junket operators are numbered. The brokerage said, “It’s probably reasonable to assume junket VIP revenue will go to near-zero levels.”
While determining the scope of the probable ending of VIP junket business in the SAR is quite difficult, some executives simply don’t believe that the recent developments in the industry will hurt their operations. For instance, MGM Resorts CFO Jonathan Halkyard admitted that junkets indeed deliver VIP players to its casinos but he stressed that VIP gamers don’t play a very critical role in the overall health of the casinos.