Authorities in Macau have confirmed that Alvin Chau and 11 others have been arrested over cross-border gambling and money laundering accusations. Macau casino stocks fell on the news.
Macau.- The Macau government has confirmed that Alvin Chau Cheok Wa, CEO of Suncity Group Holdings, has been arrested in Macau. Some 11 people were arrested in total, with the news provoking drops in Macau casino stock prices on Monday.
According to local media reports, Cheok Wa was placed in pre-trial detention in Macau, following a decision by a local judge. MGM China shares fell 11 per cent, and Wynn Macau and Sands China shares fell 9 per cent and 6 per cent respectively on Monday due to concerns about the short- and long-term consequences of the arrest.
A warrant for the CEO’s arrest had been issued after the Wenzhou City Prosecutor’s Office in Zhejiang Province accused him of being involved in cross-border gambling activities. The Wenzhou City Procuratorate started to investigate a cross-border gambling criminal syndicate in July 2020 and claims to have discovered that Chau was the leader.
A press release from the Macau government read: “According to the evidence obtained in the criminal investigation, the police authorities of the Macau Special Administrative Region took, in accordance with the law, this morning (27 November) a suspected person with the surname Chau and others involved.”
Legal experts and commentators have debated whether a mainland Chinese law prohibiting “cross-border” gambling also applies to Macau, which is the only place where gambling is legal in China.
Analysts at JPMorgan Chase Securities said the arrest warrant for Alvin Chau Cheok Wa indicated that intermediary activities in Macau may also be protected by the ban on cross-border gambling.
Impact on Casino stocks
Analysts at JP Morgan Securities said that although the role of VIP gaming in Macau’s casino industry has declined, stock prices had been harmed because “some investors may interpret this as a signal of a potentially broader clampdown on gambling itself, a view that we don’t agree with but cannot disprove.”
According to GGRAsia, Suncity Group accounted for 40 per cent to 45 per cent of the junket market in Macau based on 2019 figures.