Macau Junket CEO Arrested, Accused Of Conspiring With Philippine POGOs

Alvin Chau, the CEO of Suncity Group Holdings, was taken into custody this weekend after a warrant for his arrest was issued in the Chinese city of Wenzhou on Friday.

Suncity is Macau’s largest junket operator, and China’s main complaint against the 47-year-old Chau is as basic and nebulous as you’d expect: money laundering.

However, that’s not the only charge he’s facing. Chau is also being accused of setting up a “live web betting platform” in the Philippines. In other words, Chau is accused of running a POGO.

But POGO or not, this is one bounce we never expected.

Suncity Group is a massive company, seemingly too big to bother with something as controversial – and as comparatively non-lucrative – as POGO operations.

Of course, there’s no word on Chau’s side of the story, and China has recently undertaken several measures to crack down on gambling in Macau and – where it can – international online gambling that attracts Chinese citizens.

In Chau’s case, the state’s assertions are damning, as reported by Fortune:

“Authorities in Wenzhou allege Chau ran a crime syndicate that included nearly 200 shareholders and 12,000 [middlemen] who built up a network of more than 80,000 Chinese gamblers. They claim the group created asset management firms to help gamblers with cross-border transfers and recover unsettled debts. … [On] Saturday, the Macau government stressed its determination to cooperate with mainland authorities. ‘The Macau Special Administrative Region reiterates that all employees of the gambling industry must strictly abide by national and Macau’s related laws.’”

Chau’s next step remains unclear, though Suncity issued a statement wherein the company expects its CEO to resign more or less immediately.

Whether or not that saves the brand is to be determined, as Monday saw Suncity shares suspended from trading on the Hong Kong Stock Exchange, while shares of other major Macau gambling companies plummeted.

Tuesday morning, Suncity shares resumed trading, but they cratered a whopping 40%.

And you thought crypto was volatile!

The immediate takeaway here, according to many industry insiders and investment experts, is that China is actually serious about significantly scaling back the Macau gambling market.

While Macau is the world’s largest destination gambling hub by far – generating something on the order of six times the take of Las Vegas each year – China seems uninterested in continuing to encourage the gambling product.

Per Fortune:

“Macau’s gambling industry contributes over half the city’s GDP, about 80% of its tax revenue, and employs 17% of its residents. Chinese leaders have long said they want to reduce the city’s reliance on the industry, but it remains unclear how they’ll achieve that goal.”

Other analysts, of course, are skeptical, believing that China will eventually see Macau as a sort of “necessary evil,” whereupon they’ll presumably scale back their recent hands-on approach of (mis)directing the industry in the region.

Regardless, for the Philippines market, this is great news.

Yes, it might spook many of the remaining POGOs to hop on out of town, but at this point, that would arguably be a good thing. POGOs are a political boondoggle in the Philippines, and domestically legal iGaming is now available – albeit in a limited fashion – inside the country’s borders.

But more than that, before the coronavirus pandemic hit in late 2019/early 2020, the Philippine destination gambling market was making big gains on Macau.

With the latter now tempering its operations and ambitions considerably, that’s doubly true today.

Sure, the Philippine IR industry has a long way to go before it gets back to pre-COVID levels, but with less and less competition from Macau, that should happen even sooner than expected.

Of course, if you’re a seasoned online gambler in the Philippines, none of this probably means much. It’s likely that you’ve been using legal online casinos and Philippines online sportsbooks for some time now, as the sites we recommend have all been in safe operation for years.

And that – regardless of the situation in Macau – will continue to be true.

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