Suncity Group Holdings has now closed all of its VIP gaming rooms in Macau and has reportedly stopped paying some staff, Bloomberg reports. The news comes after the company’s CEO, Alvin Chau, was arrested earlier this week, amid accusations of money laundering and illegal cross-border gambling.
The shutting of the company’s VIP rooms will result in a cut of around a third of its Macau headcount, a source familiar with the matter claims. The closure of the rooms has not yet been publicly announced, while Suncity Group has not responded to media requests for comments. It is not clear if the closures are meant to be temporary or permanent.
Suncity staff cannot currently access company systems, including email and chatrooms, due to the ongoing police investigation, two of the people told the previously cited news source. The group’s website has also gone offline.
On Tuesday, Teledifusão de Macau also reported the closure of the VIP rooms in the city. According to the media group, Suncity hasn’t rolled out a salary suspension policy, but will implement “structural adjustment” later due to the VIP room closure.
Additionally, Macau’s Labour Affairs Bureau stated it had been following up with the group on staff arrangement, setting up a hotline for affected employees. The bureau has not received any complaints so far, according to local media.
Since Chau’s detention over the weekend, shares of the company’s Hong Kong-listed arm Suncity Group Holdings, which does not include its junket operation, have dropped nearly 50%. Moreover, its shares were suspended from trade on Wednesday, the second time in three days.
The news comes amid a broad investigation into Suncity’s CEO. Chau, the founder of Macau’s biggest junket operator, which brings in high rollers to play at casinos, is being accused of both money laundering and alleged links to cross-border gambling.
While gambling is barred in China, junkets operate on the mainland by wooing Chinese punters to Macau with private jets and hotel suites. They are also given credit lines to gambling in Hong Kong dollars, which can be repaid in Chinese yuan or with assets.
Notably, Suncity accounted for more than 40% of Macau’s junket market. Now, Macau’s junket revenue could contract by half in the coming weeks, according to experts, which also predict the VIP sector may only drive about 4% of casino earnings by 2023.
Chau’s arrest marks the first time a prominent individual in the Chinese gaming business has been targeted, and proves authorities’ new zero-tolerance approach to the promotion of gambling in mainland China. Outflows of gambling-related funds into Macau were described as a “national security risk” by the government last year.
But while Suncity is clearly the most affected party by the recent developments, other operators have also taken a hit from the crackdown. Shares in Wynn Macau Ltd, the casino operator seen as most reliant on Suncity’s gaming rooms, took an 8% hit on Wednesday, bringing this week’s losses to 18%, reports Reuters.
Suncity, which in 2019 operated up to 17 VIP gaming rooms in Macau, reportedly operated rooms in properties owned by all six of the enclave’s licensed operators: Wynn Macau, Sands China, MGM China, SJM Holdings, Melco Resorts, and Galaxy Entertainment. In emails to Reuters, both Melco Resorts and Wynn said they have suspended their Suncity rooms.
Earlier this week, Suncity Group said that Chau intended to resign as chairman of the board and executive director. The statement also noted that “the group is dependent on the financial support from Chau and his related companies,” and that in the event the group loses his support, “the financial position, business and operation of the group will be adversely affected.”
Original article: https://www.yogonet.com/international/news/2021/12/01/60434-suncity-closes-macau-39s-vip-gaming-rooms-following-ceo-alvin-chau-arrest
