It was announced that the eastern Chinese city of Wenzhou had issued an arrest warrant for SunCity Gaming Promotion Company owner Alvin Chau, which had negative consequences for the entire region.
Arrest Of Macau’s Casino King
According to Wenzhou authorities, Alvin Chau has been accused of setting up overseas gambling platforms and conducting illegal online gambling through cross-border gambling operations on behalf of SunCity Gaming Promotion Company. Together with several other employees of the company, Chau was arrested in November 2021.
Alvin Chau is a 47-year-old businessman who manages the SunCity Gaming Promotion Company. Alvin is known as Macau’s Casino King as SunCity is the largest junket business in Macau. Chau’s gambling business made a great profit in the region, with SunCity accounting for 25% of the region’s gambling revenue.
For many years, Alvin Chau was organizing junket tours to Macau casinos, the only place in China where gambling is legal. Today Macau is known as the Las Vegas of Asia and is considered one of the largest and richest gambling centers in the world. The gambling business brings more than 70% of Macau’s budget revenues.
Alvin Chau was arrested at the end of November 2021 on charges of running a gambling business in mainland China – mainland Chinese citizens are prohibited from gambling, except in China’s government lotteries. It has been reported to conduct illegal cross-border and online gambling transactions involving about 80,000 mainland Chinese players. After Mr Chau’s arrest, casino accounts were frozen, and SunСity Company had to stop its activity.
Two Years Of Investigation: Chau Was Accused Of Illegal Activities
Since 2020, Beijing has strengthened its campaign against cross-border gambling by issuing several government and legal notices and updating the laws. They aim to prohibit mainland Chinese citizens from gambling overseas. That is why the organization of gambling is considered to be a crime.
The authorities accused Chau of setting up a network of agents in China to help locals engage in cross-border gambling activities, as well as creating an asset management company on the mainland to conduct cross-border funds transactions.
In November, the Wenzhou authorities issued an arrest warrant for Alvin Chau. The entrepreneur was taken by the police after a two-year investigation. There was an announcement about an illegal gambling syndicate and money laundering. Also, the investigation revealed that Alvin Chau launched online gambling platforms in the Philippines in 2016.
Chau started an asset management company in mainland China, he was providing players with cross-border capital exchanges. Alvin Chau had clandestine bank accounts to organize cash services for gamblers.
A tremendous amount of money was involved in this case. In order to make his illegal profits, Chau hired mainland Chinese people as gambling agents. He managed to arrange gambling overseas for Chinese citizens and engage people in cross-border online gambling through high credits.
The police announced that the gambling syndicate has 199 shareholders, over 12,000 agents who were promoting gambling activities, and more than 80,000 gamblers in mainland China. Therefore, Chau started a large cross-border gambling criminal activity and engaged other members.
Although an arrest warrant was issued by the Wenzhou Public Security Bureau. The Macau Police that arrested Chau said that this case would be tried under Macau law, despite it being a little bit different from that of mainland China.
How Arrest Affected Macau Economy
The arrest of Alvin Chau had a great impact on the Macau economy – today, local authorities intend to strengthen the legislative regulation. These measures will be aimed at enhanced government control over casinos. The authorities attempted to introduce additional laws for the distribution of profits.
Government announcements on the gambling industry have made serious changes. Investors become anxious with the news of the upcoming changes in the gaming industry. Moreover, they worry about further regulations of Chinese tech companies as well. After that, entrepreneurs began to massively sell their casino shares as well as securities of large Chinese tech companies.
Some years ago the situation in the gambling business in Macau has deteriorated somewhat due to the introduction of COVID-19 restrictions. However, even so, the industry managed to make a profit. Now, after the admission of Chau in illegal activities, businesses have suffered incredible losses. Macau casino stocks plummeted, resulting in heavy losses. So SunCity Company shares fell by almost 48%, while other gambling businesses lost up to 10%.
The Chinese government has long argued that capital flight from China jeopardizes the national economy. Particular attention has been paid to corruption, as it is believed that the junket industry creates circumstances to circumvent China’s capital controls through shadow banking and using cryptocurrencies.
Today the central government is planning to improve legislative regulation, which will entail some restrictions. Macau has significant autonomy, therefore it independently regulates the gambling business. In order to run a legal business, a gambling establishment must obtain a special license from the authorities. The license can be obtained by companies to which the state has enabled a concession. However, it is assumed that the authorities may not renew the concessions for some companies.