Suncity shuts VIP gaming rooms in Macau after CEO’s arrest -sources

HONG KONG – Embattled

gambling


group


Suncity


Group

Holdings has closed all of its

VIP


gaming


rooms

in

Macau

, the world’s largest

gambling

hub, after the company’s CEO was arrested, two

sources

with direct knowledge of the situation told Reuters.

The shutting of the company’s

VIP


rooms

will result in a cut of around a third of its

Macau

headcount, according to one of the

sources

, a senior casino executive who declined to be identified as the closure has not been publicly announced.

Suncity


Group

, whose shares were suspended from trade on Wednesday, did not immediately respond to a request for comment.

The news comes amid a broader investigation into

Suncity

, which has sent

Macau

-listed casino stocks tumbling for a third day in a row. Shares in Wynn

Macau

Ltd, which analysts say is the casino operator most reliant on

Suncity

‘s

gaming


rooms

, slid 7% on Wednesday, bringing this week’s losses to 18%.

Alvin Chau, the CEO of the company as well as the founder of

Macau

‘s biggest junket operator which brings in high rollers to play at casinos, was arrested on Sunday over alleged links to cross-border

gambling

.

Macau

authorities have accused Chau and 10 others of using the former Portuguese colony as a base for an illegal “live web betting platform” in the Philippines that attracted mainland Chinese.

A warrant for his arrest was also issued on Friday by the mainland Chinese city of Wenzhou.

“The writing was on the wall already. But nothing was done in

Macau

until the Wenzhou police talked about it,” the executive said.

While Chau’s junket operations, also called

Suncity

, are not part of the listed

Suncity


Group

, they have previously been singled out by mainland China’s state-run media, which said they harmed China’s social order.

A 2019 article by the Economic Information Daily, a unit of China’s state news agency Xinhua, alleged that the annual amount of online betting on websites run by

Suncity

was more than 1 trillion yuan ($155 billion).

Suncity

has also not responded to a request for comment on that estimate.

One of the casino executives told Reuters that

Suncity

operated

VIP


rooms

in properties owned by all six of

Macau

‘s licensed casino operators – Wynn

Macau

, Sands China, MGM China, SJM Holdings, Melco Resorts and Galaxy Entertainment.

In 2019,

Suncity

operated up to 17

VIP

clubs in

Macau

and accounted for nearly half of the

gambling

hub’s

VIP

market, the executive added.

The six licensed casino operators have not responded to Reuters requests for comment.

Suncity


Group

said this week that Chau, who is both CEO and chairman, intended to resign. Reuters efforts to contact Chau or his lawyer have been unsuccessful.

Suncity


Group

‘s stock plunged 48% on Tuesday to a record low after being suspended from trade a day earlier, valuing it at HK$880 million ($113 million).

Suncity

has also said its operations would not be impacted in the event that it ceased to have Chau’s support. –

Reuters