Suncity Took $920M in Illegal Proxy Bets, Macau Cops Tell Court
Posted on: November 14, 2022, 08:02h.
Last updated on: November 14, 2022, 08:25h.
Defunct Macau mega-junket Suncity generated US$920 million in illegal proxy bets between August 2017 and June 2020, according to the gambling hub’s judiciary police.
That’s despite its on-trial former boss, Alvin Chau, telling a Macau court his company got out of the proxy business when the enclave’s government issued a guideline to ban it in 2016. It was officially outlawed in 2018.
Proxy betting is where gamblers use a third party to place bets at a live casino. Bets are often arranged through mobile apps, and the results are relayed or video-streamed in real-time. As strange as it sounds, it’s an attractive proposition for gamblers in mainland China, where there are no casinos.
Underground Banking Channels
Ho Ka Weng, an investigator for Macau’s Judiciary Police (PJ), testified Friday that Suncity facilitated illegal cross-border capital transfers equivalent to around US$165 million through underground banking channels for proxy betting. This was to circumvent strict laws against cross-border gambling and the movement of cash out of the mainland.
Chau, 48, is charged with 20 other defendants with illegal gambling, criminal association, fraud, and money laundering. He has pleaded not guilty to all charges.
As chairman and CEO of Suncity, he was one of the wealthiest and most powerful people in Macau until his arrest last November. The now-defunct junket company was responsible for an estimated 25% of Macau’s VIP market segment revenue, which in 2014 alone would have been US$11 billion.
Proxy Betting by Proxy?
Earlier in the trial, Chau admitted Suncity had been involved in proxy betting. But he claimed he had transferred the operation to a company called UE Group, owned by Chinese-Malaysian junket operator and poker player Richard Yong Seng Chen.
Yong was arrested in 2014 in Las Vegas and pleaded guilty to operating an illegal World Cup betting operation out of a luxury villa at Caesars Palace.
But Ho claimed this had now become a proxy betting operation by proxy, and that Suncity retained a 50% stake in the operation. He produced a financial statement prepared by a director of the Suncity accounting department, which he claimed proved this.
Billion Dollar Tax Dodge
Chau and Suncity are also accused of cheating the Macau government out of more than US$1 billion in gaming taxes by offering illegal side-betting operations.
This involved the junket group allowing VIP clients to multiply stakes on bets placed at Macau casinos. These would be settled later, tax-free, according to prosecutors.
The court heard last week that 62,588 multiplier bets for the total rolling turnover of around US$10 billion were processed. Those took place in 229 Suncity VIP rooms and gaming areas between 2013 and 2021. The figure was hotly disputed by Chau’s lawyers.
On Friday, another PJ investigator, Lei Siu Ieng, testified that documents from the Suncity servers showed that 17 Suncity development projects were linked to the debt repayment of under-the-table betting.
Final arguments are scheduled to be heard November 21.
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