Under fire in China for allegedly sponsoring online gambling in violation of the country’s laws, Macau junket giant Suncity Group said it will discontinue all the online and proxy betting services it operates legally in jurisdictions outside Macau, a move that could have significant implications for those markets.
Speaking at a press conference at the Mandarin Oriental Macau last week, Chairman Alvin Chau denied any illegal activity in China but nevertheless delivered a blanket promise that Suncity would apply Macau law globally, meaning the company will not partake in proxy betting or online gaming anywhere in the world.
“Suncity Group is deeply sorry for any inconvenience caused to the Macau government and the possible negative impact on Macau gaming concessionaires,” he said. “We hope the concerns generated in both Mainland China and the Macau SAR will be eased.”
The press conference was called in the wake of a report published in China by Economic Information Daily, a site linked to the official Xinhua news agency, accusing Suncity of signing up Chinese players in its Macau junket rooms to gamble via online and proxy betting services, which are illegal in Macau as well.
Macau regulators responded to the report by meeting separately with Suncity and later with representatives of the other junkets and the city’s six casino operators, reportedly to stress the need to adhere to local and foreign laws on gambling.
China’s Public Security Ministry, meanwhile, pledged to continue a wide-ranging crackdown on cross-border online gambling, targeting underground banks and other payment platforms and network operators and companies that provide technical support to the sector.
Suncity’s far-flung operations include 18 VIP rooms in Macau and another 14 in the Philippines, Vietnam, Cambodia, Korea and Australia. Its holdings also include a 34 percent stake in a resort-scale casino under construction in Vietnam and a recently acquired 28 percent stake in the company that owns a gaming resort near Vladivostok in Russia that caters mainly to gamblers from China.
In the Philippines, a regional hub for online and proxy betting, Suncity’s exit could sink operator earnings by 3 to 5 percent, according to Goldman Sachs analyst Simon Cheung.
Aaron Salvador of Deutsche Bank estimates that up to 18 percent of Philippine gaming revenue could be at risk as he expects other Macau-based junket operators will follow Suncity’s lead.
He estimates that Suncity alone accounts for 10 percent of gaming revenue in the Philippines and that upwards of 35 percent of the country’s total gaming revenue is junket-driven, one-third of which he estimates could be proxy-related.
Conversely, Credit Suisse analyst Kenneth Fong reacted positively, saying gaming volumes in Macau could see a boost from returning VIP players who left to gamble in other countries.
