Suncity Group Posts $60M Loss in ‘Dark’ 2021, Not Accounting for Junket Collapse
Posted on: March 30, 2022, 09:16h.
Last updated on: March 30, 2022, 11:07h.
Suncity Group has reported losses of HK$469.3 million (US$60 million) for 2021, compared with an HK$871.5 million ($111 million) profit for the previous year, according to its newly published financial report. That’s despite an 87 percent increase in revenue, year on year, for operations that did not include its junket business.
Despite some hurricane-force headwinds, the Hong Kong-listed company said it was plowing on with the development of its Asian casino resort operations.
Last year was a stinker for Suncity. But 2022 has been no better for the company, as Western sanctions against Russia threaten to disrupt the operations of its Tigre Cristal Resort in Russia’s Primorye Region.
Suncity said in its most recent report that it may be “too early to fully assess the impacts of the recent sanctions on Russia,” adding that it was monitoring the situation and would comply with [Macau] government policy.
The report does not mention Chau’s arrest, other than to describe 2021 as a “dark year in the group’s operating history.”
But it did address the collapse of the junket industry in Macau. The reliance of the casino sector on the VIP segment had “already gone,” which presents opportunities for the company elsewhere, it said.
The rise of the mega-rich and middle-class customers in South Korea, Japan, Singapore, Thailand, Malaysia, the Philippines, etc, are the fundamentals of demand for high-quality integrated resorts with a localized theme in Asia,” the report stated. “There is fairly limited supply of VIP gaming facilities to cater to high-end demand since Macau has now virtually left the VIP junket business.”
Suncity opened the Hoiana integrated resort in Vietnam in 2020 and it’s building another in the Philippines, the Westside City Project in Manila.
Last year culminated in the arrest in late November of its founder, CEO, and chairman, Alvin Chau, on charges of operating a criminal syndicate, offering illegal online proxy betting from the Philippines, and money laundering.
The arrest of Chau signaled Beijing had run out of patience with the junket industry, which has for years channeled a steady stream of wealthy Chinese gamblers into Macau’s casinos.
That allegedly enabled money laundering and capital flight. This resulted in the December dissolution of Suncity Gaming Promotion Company Limited (SGPC), which formerly controlled around 40 percent of Macau’s VIP segment. Figures for SGPC were omitted from the financial report.
In 2021, “COVID continued impacting all segments of our business and quarantine-free international travel has not yet resumed,” the company said in its report.
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