Macau Regulator Tightens Screws on Junkets After Chinese State Media Attack on Suncity

Posted on: July 23, 2019, 02:42h. 

Last updated on: July 24, 2019, 01:42h.

Macau gaming regulator, DICJ, said it will continue to conduct random spot checks on the enclave’s junket operations, Inside Asia Gaming reports. The increased oversight of the industry follows the denunciation by Chinese state media earlier this month of Suncity, the biggest junket operator in Macau and the world.

Macau junket
Alvin Chau, CEO of super-junket Suncity, held an emergency press conference last to apologize to Macau authorities for attracting the ominous attention of China’s state-controlled media. (Image: Bloomberg)

Chinese financial paper Economic Information Daily (EID), owned by China’s official state-run press agency, Xinhua, accused Suncity of causing “great harm social economic order” by targeting mainland citizens with multibillion-dollar online gambling and proxy betting operations, based out of the Philippines and Cambodia.

Xinhua acts a mouthpiece of the government in Beijing and bad press in its pages can be a precursor to retaliatory measures towards an individual or entity that has displeased the politburo.

EID claimed Suncity’s online gambling revenue surpassed that of the Chinese Welfare Lottery, which, along with the Sports Lottery, is one of only two legal opportunities to gamble in mainland China. The Welfare Lottery generated roughly $73 billion in revenues last year.

Suncity Loses Face

Suncity CEO Alvin Chau held an emergency press conference last week where he denied that his company was involved in online gambling operations directed at China, but he still felt the need to grovel to Macau’s government, saying he was “deeply sorry for any inconvenience caused … and the possible negative impact on Macau gaming concessionaires (licensees).”

Macau is an autonomous territory of China under Beijing’s “one nation, two systems” policy. Nevertheless, Central Government has influence – just as it does in Hong Kong, where pro-democracy demonstrations were held last week to protest at Beijing’s creeping control.

But Macau’s economy is completely reliant on tourists from the Chinese mainland to feed its casino economy and has more to lose than Hong Kong by offending Beijing.

The last time President Xi Jinping’s longstanding “anti-corruption crackdown” turned its attention to the junkets that supply the VIP segment with mainland high rollers, it resulted in a 26-month economic slump for the world’s biggest gambling hub.

Macau’s authorities are not taking any chances. DICJ announced last week it had conducted spot checks on 25 junket-controlled VIP rooms at seven Macau casinos to ensure mainlanders were not being signed up for online gaming accounts.

Slim Hope for Macau License?

For Suncity, the implied threat from Xinhua is that it will not be granted a gaming license in Macau. The company has diversified from middleman to operator in recent years, investing in the $4 billion “Hoiana” integrated resort in Vietnam which is scheduled to open later this year, as well as in Russia’s first integrated resort, Tigre de Cristal.

The EID article came just weeks after Suncity announced its ambition to apply for a Macau gaming concession when the licenses come up for renewal in 2022.

The DICJ, which licenses the junkets, announced Monday that any company found to be flouting the rules would risk losing its license.

“In the future, relevant inspections will continue to ensure the gambling industry operates according to the law and develops healthily,” it said.