Shares in Macau’s leading casino operators again posted heavy losses today (Tuesday) following the detention of gambling tycoon Alvin Chau for allegedly facilitating cross-border gambling in mainland China.
In today’s session on the Hong Kong Stock Exchange, MGM China fell more than 4 per cent, Wynn Macau lost 6.5 per cent and Galaxy Entertainment Group 2.5 per cent. Sands China recorded a 5.2 per cent drop and SJM, founded by gaming tycoon Stanley Ho, fell 3.5 per cent.
However, the biggest drop was recorded by Suncity Group Holdings Limited, whose founder and CEO is Alvin Chau.
The company’s shares sank 48 per cent today after trading resumed to HK$0.13, having been suspended on Monday.
Suncity Group is the listed arm of Macau registered junket Suncity Entertainment, the biggest intermediary between Macau casinos and high rollers, for which it organises exclusive travel packages and operates ‘VIP’ gaming rooms on behalf of casino operators in Macau, the only place in China where gambling is legal.
In a statement sent to the Hong Kong Stock Exchange, the company revealed that Chau had offered his resignation. In the same statement, the group noted that it “depends on the financial support” of its founder.
The board further assured that the tycoon’s detention had “no direct and tangible adverse effect” on the group’s financial position, business or operations.
The company also denied that Tigre de Cristal, a casino located near Vladivostok in south-eastern Russia near the border with China and which operates one of the group’s subsidiaries, is actively involved in the criminal network to lure Chinese customers.
Chau is the highest-profile executive targeted by authorities since Beijing banned the promotion of gambling in mainland China last March and the territory proposed stricter regulations for casinos in September.
Alvin Chau “is suspected of setting up a cross-border gambling criminal group, illegally organising gambling operations involving Chinese citizens at overseas gambling halls of which he is a concessionaire, and participating in cross-border network gambling activities involving huge amounts of capital, having seriously damaged the country’s social order,” Macau authorities said in a statement.
On Friday, the procuratorate of the city of Wenzhou, in eastern China, urged Alvin Chau to turn himself in to the authorities and cooperate with the investigation.
According to the statement issued by the local police, Chau is alleged to have lured a total of 80,000 gamblers from the mainland.
Chau developed a network of staff inside China, to organise visits to gambling halls abroad and participate in cross-border online gambling activities, the statement said.
The Macau resident is accused of establishing an asset management company in mainland China to facilitate the exchange of assets for gambling chips in order to circumvent the strict capital outflow controls on the mainland and facilitate the collection of debts incurred by customers.