In recent months, Chinese officials have rolled out a series of new laws and restrictions to limit gambling in the administrative region of Macau. Once revered as the gambling epicenter of the world, Macau’s reputation seemed untouchable.
High-Profile Arrests
However, Sunday brought the arrest of 11 individuals allegedly involved in cross-border gambling and money laundering. And with these arrests came a massive sell-off of stock in Macau’s casinos.
Among the detainees was high-profile junket operator Alvin Chau. Founder of Suncity, a group that arranges gambling trips (junkets) for big-budget players.
Suncity is responsible for more than half of all junket revenues in Macau. This translates to about 25% of all gaming revenues for the region.
Officials claim that Suncity’s Alvin Chau was the ringleader of a criminal gambling syndicate with more than “12,000 gaming agents and 80,000 members across China.”
The Fall of An Empire
Since the start of the year, Suncity stock has been devalued by 165%. Similarly, casinos and other companies in Macau saw drops in stock value.
MGM China is down 10%, Wynn Macau is down 7.8% and Sands China saw a 5.3% drop. The sell-off has prompted officials to act quickly. On Monday, China’s stock exchanges suspended all trade on Suncity Group.
These changes have shaken government officials in Macau, as the advent of COVID-19 has already dropped revenues by 80%. It seems that the region’s gambling empire is toppling down.
As China continues to enforce its tough stance on gambling laws, it is unclear how the socio-economic conditions in Macau will change. The area has long relied on casino revenues for government funding and employment for more than three-quarters of its population.
Most of Macau’s casinos are still in operation. However, recent travel restrictions consequential to the new Omicron variant of COVID-19 have made it nearly impossible to enter Macau.
At the moment, it does not seem as if China is providing support for those affected by these arrests and legislative adjustments.
What Happens From Here
Even so, most gaming operators are trying to appease government officials by withholding complaints. Ben Lee of Macau’s IGamiX, a gaming consultancy group, said the following on the matter:
“[This action] means that China will no longer tolerate Macao promoting in any form or manner gambling into the mainland,”
Ben Lee, Founder of IGamiX
Still, this is only the beginning. With such an elaborate scheme, there is little doubt as to whether other gaming entities were involved in similar illegal dealings.
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Source: CNN