Chau Conviction Signals Junkets’ Demise

The conviction and sentencing of Alvin Chau (l.), former head of Macau junket operator Suncity Group, signals the end of freewheeling VIP operations in the city. Chau was found guilty of illegal gambling and other charges and was sentenced to 18 years behind bars.

Chau Conviction Signals Junkets’ Demise

On January 18, Alvin Chau, head of onetime largest and most important Macau junket business Suncity Group, was convicted of multiple crimes including illegal gambling and criminal association and sentenced to 18 years in prison.

Chau’s downfall may be the surest indicator that Macau’s once-dominant junket industry is done for. Steve Vickers, CEO of Hong Kong-based Vickers and Associates, told GGRAsia the lengthy sentence “represents the seriousness with which his activities, both within Macau, Mainland China and elsewhere in the region, were viewed.

He called it the “definitive end” of Macau junkets as they once operated, which “enabled significant capital outflows from Mainland China.”

Gaming consultant David Green of Newpage Consulting added that the Chau sentence serves “as a proxy for other junkets” and a warning to others to stay on the right side of Macau’s new junket regulations.

Businesses like Suncity operated by bringing high rollers to casino VIP rooms, arranging their credit lines and accommodations and taking a piece of the action.

Green told GGRAsia “premium direct” gaming will “largely replace junkets” in the Macau market. The term “premium direct” is commonly understood to refer to directly-managed VIP players.

“It should be a more profitable segment for [operators], given they will not be paying commission to intermediaries. They will be more aggressive with own-play commission/rebates,” he added.

Vickers said high rollers from Mainland China “will, in future, probably select safer jurisdictions rather than take a direct risk on Macau.”

The industry still exists, but has shrunk from 235 operations in 2014 to just 36 this year. All remaining junkets must abide by a host of new rules, including doing business with just one casino concessionaire and proving their financial and ethical suitability.

Chau once was one of Macau’s most influential entrepreneurs, a celebrity whose love life was fodder for tabloids. The 48-year-old billionaire was first arrested in November 2021; less than a month later, Suncity officially closed its junket business and Chau resigned as chairman of the group, which has stakes in integrated resorts in Vietnam, Russia and the Philippines, according to Macau Business.

Of almost 300 original counts against him, 126 were dismissed. While found not guilty of money laundering, Chau was sentenced to a dozen years for triad offenses, 18 months for each of 103 counts of facilitating under-the-table bets, and five years for each of 54 counts of defrauding the government and the casino operators. He got an additional two and a half years for taking telephone bets, for a total sentence of 448 years. With combined charges, that number was reduced to 18 years.

Of 20 codefendants, eight were acquitted. The rest received jail terms ranging from nine to 15 years. Four defendants received suspended sentences.

In addition to jail time, Chau must pay $831 million to the Macau government for lost revenue from betting under the table in Suncity VIP rooms and reimburse five casino concessionaires who claimed losses due to illegal betting activities: Wynn Macau, Galaxy Entertainment Group, MGM China, Sands China and SJM Resorts.

Throughout the four-month trial, Chau declared his innocence. But in handing down the sentence, Judge Lou Ieng Ha pointed to “68,000 records from Suncity’s server related to betting under the table” and other offenses.

“Although Alvin Chau claimed to have suspended telephone betting in 2019, he continued to operate telephone betting services in secret … Alvin Chau promoted illegal betting activities in Macau without the approval of the Macau government,” the judge said.

Employees who broke the law “were not able to do so without the consent of the leader of Suncity, Alvin Chau.”

Chau’s lawyer, Pedro Leal, said there is “insufficient evidence to prove the case. I will communicate with my client and advise him to appeal.”