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Fiona Simmons August 16, 2022 3 min read
35 Suncity Junket Defendants Plead Guilty
China continues to crack down on junket operators who it argues have been flouting the rule of law by engaging in cross-border gambling. In the latest such development, Beijing moved against 35 individuals who are linked to Macau’s Suncity junket operator, who has pled guilty to the charges against him.
Suncity Group Defendants Plead Guilty
The news was reported by the local media outlet Macau Business. The defendants pled guilty to having facilitated cross-border gambling operations as part of the syndicate, helping well-off Chinese customers travel to VIP junkets, usually overseas.
The Suncity junket business was dismantled with the fall of Alvin Chau, the former CEO and chairman of the organization who was arrested in November 2021 along with many of the other defendants. The sprawling network operated by the Suncity junket had recruited more than 60,000 agents and assisted gamblers to reach overseas gambling markets in places such as the Philippines, the court in Wenzhou said.
However, Chau did not make an appearance as part of the group trial. He will appear in court on September 2 with 21 other defendants. Presently, Chau is detained in Macau but he may be extradited and face courts in Beijing which are presumably tougher. Prosecutors assert that Suncity used a number of companies and underground banks to conduct their business despite regulatory prohibitions.
Underground banks refer to as services that help gamblers move money without raising suspicion by financial regulators. China has a tough policy on money leaving the country for the purposes of gambling. In the latest recommendation to Macau concessionaires, authorities said that casino resorts must focus on attracting overseas gamblers as opposed to luring Chinese mainlanders to play.
The End of the Junket Model
Suncity Group’s fall from grace triggered a chain reaction that engulfed the junket business in Macau, significantly diminishing its clout with Macau and issuing new, more restrictive rules on how such businesses may operate. Junkets today play a second fiddle to the gambling industry which has been urged to prioritize tourism over baccarat tables, leaving casinos scrambling for alternatives.
Pulling away from the junket model is not all bad news. Casinos will get to do more direct marketing and retain a bigger portion of their revenue. Junkets are still allowed on-site but they will operate in a more streamlined manner whereby an operator needs to commit to a single concessionaire and vice versa.
Chau’s own past is chequered. He is allegedly a member of the 14K triads, notorious organizations across Asia, which built its wealth on various illegal activities. Chau has denied these allegations vehemently. He did make significant efforts to make junkets a viable business model, though, through the use of VIP gambling rooms. Chau is still a stakeholder in Suncity Group, which owns land-based casino projects in both Russia and Vietnam.