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