Following the arrests for ‘illegal gambling,’ Macau casino stocks have dropped
Image credit: Bloomberg Quint
Following the arrest of 11 people on suspicion of money laundering and illicit cross-border gambling, shares in Macau casino operators have plummeted.
Authorities had previously stated that they were questioning Alvin Chau, a prominent figure in the gaming industry. According to Chinese official media, Mr Chau is suspected of leading a cross-border gambling syndicate.
In mainland China, casino gambling is prohibited, but it is permitted in Macau, the world’s largest gambling hotspot.
It’s unclear if Mr Chau was among those detained, although the South China Morning Post in Hong Kong said that authorities had identified a Macau businessman with the surname Chau.
Suncity Group Holdings’ chairman is Mr Chau. He is also the creator of Suncity, Macau’s largest junket operator, which organises affluent gamblers’ excursions to Asian casinos.
MGM China was down 10%, Wynn Macau was down 8%, and Sands China was down more than 6%.
According to the Global Times, Mr Chau is the boss of a cross-border gambling criminal gang with over 12,000 gaming agents and 80,000 members across China. He is also a controlling shareholder of Sun Entertainment Group, a Hong Kong-listed film production and cremation services company, which said in a stock exchange statement on Sunday that its board had taken notice of the Wenzhou and Macau investigations.
On Monday afternoon, Sun Entertainment Group’s stock was down over 30%.
In recent months, officials have increased their monitoring of Macau’s casinos to better oversee their operations.
Lei Wai Nong, the city’s secretary for economics and finance, announced a 45-day consultation period on gambling operators in September, citing flaws in the industry’s oversight. At a news conference, Mr Lei listed nine areas for feedback during a news conference, including better sector regulation and government officials overseeing day-to-day casino operations.