The arrest of Suncity CEO Alvin Chau continues to have repercussions across the Macau landscape. As a result of the arrest, which charges Chau of promoting gambling in China and running a criminal enterprise, has caused Suncity to exit the junket business, there are serious doubts that it signals the end of the junket industry as a whole.
Macau gaming expert Carlos Lobo believes it’s a serious challenge to the system.
“We are at an extremely complex moment, and we will have to wait a while to understand the scale of the impact—but to me, this foreshadows the end of the junket system in Macau,” Lobo told the Macau Times.
Steve Vickers, head of a company that focuses on corporate risk, says not so fast.
“The game has certainly changed, but this is not doomsday,” he said. “As long as Macau is the only place in China where you can place a bet, and as long as Chinese people love to bet, then Macau will always do well. It just won’t be the only game in town.”
Wang Changbin, director of the Gaming Teaching and Research Centre in the Macau Polytechnic Institute told Macau News Agency that in combination with the recent decision to hold Wynn Macau responsible for debts incurred by its junket operators, junkets will have a hard time, but time will tell.
“If the pandemic can be controlled, I think the mass market would be fine,” Wang said. “But Covid-19 has had many ups and downs so we don’t know. I think maybe they will have some frustrations”
Davis Fong, a tourism professor with the University of Macau, believes the VIP sector will evolve, even without access to Mainland China.
“I am thinking some of the junkets may change their models, to find good VIPs in Hong Kong, Taiwan, Southeast Asia. This part of the business may compensate for the loss of Chinese VIP players,” Fong said.
“In Macau, they are legal, as long as they meet the requirement of Macau law. So if junkets are looking for future development, I strongly urge them to look for the Southeast Asian market. We do a lot of business nearby, such as in Hong Kong where even don’t need to fly to. They can go by boat or car, make more connections. I believe junkets will still be able to do business.”
So far, Wynn Macau, Sands China and Melco Resorts have said they’re going to eliminate junkets by the end of the year, while SJM Resorts and Galaxy Entertainment Group will continue to work with junkets.
Fong points out that in 2019, 40 percent of the total gross gaming revenues from Macau casinos came from the VIP sector, and 80 percent of that revenue came from independent junket operators, with the remaining 20 percent from business conducted by the casinos themselves.
“So in general, about 30 per cent of revenues was contributed by junkets. Let’s assume we forget this part of business, we will still have 60 per cent of the total gaming revenue,” Fong said.
Tak Chun, the second-largest junket operator in Macau, issued a statement that several of its casino partners are temporarily suspending operations with the junket operator. The loss of these junket operators means hundreds of employees are being dismissed, causing the government to become concerned.
But according to a major junket investor, Luiz Lam Kai Kuong, the government has not provided any guidance on the remain junket operators, which total over 80 companies.
“The government has so far not provided any concrete answers about what is happening and what is going to happen,” Lam said, according to Macau Business. “It has left everyone—including both gaming operators and us—in confusion and fear.
“What the government should do is to come clean about what junket operators are allowed to do and what activities are deemed illegal. The government now is just being evasive and ambiguous.”
With junket licences up for renewal in June 2022, Lam believes the government should clearly state its position.
“We don’t know what we could expect,” he says. “Even though we have our licenses renewed, what’s the point of having a license if no gaming operators would cooperate with us.”
Macau agencies— the Gaming Inspection and Coordination Bureau (DICJ) and the Macau Labor Affairs Bureau (DSAL)—are worried about the layoffs and wanted to remind junket operators of their responsibilities and that they need to “treat employees of VIP rooms in accordance with current laws and regulations.”
DSAL admitted it hasn’t received any complaints from employees of junket operators but if they do the DSAL :must follow up and deal with it in accordance with the law to protect the legitimate labor rights of employees.”
Meanwhile, Suncity has changed its name to reflect Chau’s departure from the company. The new name is Imperium Financial Group Limited. Company Chairman and Executive Director Cheng Ting Kong now owns the same 62.82 percent of the company that he shared with Chau. Cheng also owns half of majority shareholder Fame Select Ltd., which Chau still owns the other half. Cheng is also chairman of the Hong Kong company Imperium Technology Group Limited, whose business segments include online gaming, eSports, money lending, and others.
In a press release, the company said the name change “will better reflect the future business development of the group and… provide the company with a more appropriate corporate image and identity which will benefit the company’s future business development and is in the interests of the company and the shareholders as a whole.”
