Macau Junket Meltdown Could Leave Thousands Jobless
Posted on: December 13, 2021, 07:32h.
Last updated on: December 13, 2021, 10:40h.
On Monday, Macau’s Labor Affairs Bureau (DSAL) opened a special support counter for workers affected by the closure of Suncity’s junket operations in the gambling hub.
An official DSAL source who spoke to The Macau Daily Post said it was unclear how many Sun City Gaming Promotion Company (SCGP) employees would seek help. The source said the counter would remain open as long as workers needed DSAL assistance in finding new jobs.
It’s also unclear how many people SGPC employed in Macau.
In 2019, the Suncity Group said it had grown its workforce by 23.5 percent to 4,574 people the previous year, located in seven regions around the globe. At the time, it operated VIP clubs in Macau, Manila in the Philippines, Melbourne and Sydney in Australia, Incheon in South Korea, Phnom Penh in Cambodia, and Danang in Vietnam.
In February, Inside Asian Gaming reported the company’s annual staff party welcomed around 2,200 team members, who were feted as “Sun Superstars.” But this was the Suncity Group as a whole, of which SGPC was one, albeit crucial, subsidiary.
Suncity’s $40M Loan Default
To add to its woes, it emerged Monday that Suncity Group could face a radical change in its ownership structure if it fails to make a US$40.2 million payment to a syndicate of lenders.
The lenders say the loan is currently in default, and that Suncity has until Wednesday to make the payment. If it doesn’t, the lenders could gain control of the group.
According to a filing to the Hong Kong Stock Exchange, a company controlled by Chau took out the loan last July, pledging 4.99 million of his shares in Suncity Group Holdings, some 70 percent of the company, as a guarantee.
On Friday, the world’s biggest junket operator announced the immediate termination of Suncity Gaming Promotion Company Ltd (SGPC), which formerly organized trips for predominantly Chinese VIP gamblers to the casinos of Macau and elsewhere.
Shortly after, Macau gaming regulator DICJ told the junkets to stop lending money to VIP clients, eviscerating their business model.
The move was widely anticipated. It followed the arrest by Macau authorities in late November of Suncity chairman and CEO Alvin Chau and others. They face charges of organizing offshore online gambling that illegally targeted the gambling enclave and the mainland.
Just days earlier, prosecutors in Wenzhou, China issued an arrest warrant for Chau on charges of facilitating cross-border gambling.
Chau transformed the company over 14 years from a small junket operation with one VIP table at Macau’s Starworld resort into a sprawling conglomerate with interests in everything from real estate to resort development and movie production.
At its height, it controlled 17 VIP rooms in Macau and was responsible for up to a third of the gambling hub’s gross gaming revenue, equating to several billion dollars.
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