A SHOCK ARREST
Arguably the biggest junket operating in Macau up until November 2021, Suncity was a crucial part of the region’s gambling business model, facilitating large swatches of VIP interest in China’s only gambling-regulated region. Although suffering under the weight of strict Covid-19 restrictions throughout 2021 – just as every other company was – Suncity still held a reputation as the go-to junket, sourcing wealth to be spent at the private tables of Macau’s many casino destinations.
That is until the back end of November when, quite suddenly, Chau was arrested alongside an initial 10 other associates over links to cross-border gambling and money laundering. The charges made were about illegal gambling operations taking place in mainland China, after an arrest warrant was issued from the eastern Chinese city of Wenzhou. A bolt from the blue, this marked the beginning of the end for Suncity, which – already under the weight of Covid-19 restrictions – was suspended from trading.
THE END OF JUNKETS
At the time, Macau-based gaming consultant Carlos Lobo noted: “Suncity accounts for over 50% of junket revenue in Macau, which accounts for roughly 50% of gaming revenues, so Suncity accounts for 25% of gaming revenues. The impact on the gambling industry is huge... and Suncity is no longer too big to fail.”
A notable blow for an already hamstrung industry, the effects were as seismic on Macau’s industry as they were on Suncity and Chau himself. As details emerged over the ensuing months, it was believed that a secret syndicate established by Chau worked by setting up overseas gambling platforms to leverage his junket operations in Macau. This illegal operation, targeting mainland China, aimed to engage local citizens in illegal online gambling activities.
“Suncity accounts for over 50% of junket revenue in Macau, which accounts for roughly 50% of gaming revenues, so Suncity accounts for 25% of gaming revenues. The impact on the gambling industry is huge... and Suncity is no longer too big to fail”
By this point, Chau had stepped down, leaving Acting CEO Lo Kai Bong to pick up the pieces on a business now on the ropes. It wasn’t until May 2022 that Chau was officially indicted by Macau’s Public Prosecution Office – finding Chau guilty of operating a secret society that illicitly exploited Macau’s gambling industry while laundering money.
I’LL SEE YOU IN COURT
After this came the court case in September, which quickly highlighted the cracks in Chau and co's claims of innocence. Ex-Suncity shareholder Cheong Chi Kin admitted to purposely developing a system that assisted with betting under-the-table transactions, bringing customers to Suncity’s Macau VIP rooms to process illegal bets. At the time, Cheong was on the stand with the former VP of Suncity’s IT department, Ali Celestino, who also admitted to creating the IT system Opsman, used to process under-the-table betting transactions.
These fissures were made all-the-more apparent when Chau changed his legal representative midway through his trial, appointing ex-junket founder Leong Hon Man after relieving his previous lawyer, Leong Weng Pun, of his duties. Leong Hon Man came from a different legal background, but it seems this change of tact was not enough to stave off prosecution for Chau.
CHAU’S SECRET SOCIETY
The trial continued, and with it details that Chau and his illegal syndicate had been using a string of registered, and all but obsolete companies in mainland China to launder debts and profits. Known as multipliers, these companies work by multiplying the face value of a recorded bet shown on a table for play and bet settlement – in essence, a form of tax evasion. According to the prosecution, Suncity’s tax evasion accounted for around 40% of its declarable tax on gross gaming revenue. But Chau, redundantly resolute, simply said at the time: “There are no links between asset management in the mainland and under-the-table bets.”
Not only is Chau’s fate sealed, but throughout the arrest and resulting trial of the man nicknamed “Junket King,” the entire economy for junkets was turned upside down
The jury would disagree, of course, but as the trial neared its conclusion, Chau’s new legal representatives still claimed that a lack of evidence existed to suggest the ex-Suncity Chairman solicited or managed under-the-table betting. And Chau’s lawyer Leong claimed the junket boss had little to gain from under-the-table betting activities, given that Suncity generated billions of dollars a year in revenue.
“Suncity Group’s revenue even exceeded that of Las Vegas. It’s the world’s largest junket company; every meeting was recorded, and even the witness of the Gaming Inspection and Coordination Bureau testified that no illegal activities were found in the Suncity VIP rooms. There is no evidence of financial transactions in any of the evidence. There is no evidence that Chau received any revenue from betting under-the-table companies,” Leong concluded.
THE KING IS DETHRONED
However, by the end, there was little debate as to Chau’s guilty status, being accused of over 40,000 under-the-table bets occurring in 229 VIP clubs. These claims from the prosecution were backed up by a posse of Macau’s biggest operators, including Wynn Macau, Galaxy Entertainment and MGM China – all seeking compensation from the now-decimated junket business.
As of 18 January 2023, Chau was sentenced to 18 years in jail after being found guilty of over 100 charges related to illegal bets exceeding HK$823.7bn ($105bn). Not only is his fate sealed, but throughout the arrest and resulting trial of the man nicknamed “Junket King,” the entire economy for junkets was turned upside down. Changes made to Macau’s gaming laws as of 2023 make it far more difficult for them to operate – which has seen junkets leave the region at best or be forced out of business at worse. The result of this has seen many VIP players migrate to the likes of Singapore and the Philippines. So in a way, it’s almost fitting that Macau’s junkets have fallen in such an explosive fashion, alongside their King, Alvin Chau.
