Chinese state media target Macau's Suncity in online gambling report

HONG KONG (Reuters) - Macau’s biggest junket operator Suncity, which operates VIP gambling rooms around Asia, has raked in billions of dollars in online gaming and proxy betting, causing great harm to China’s social economic order, a state-backed report said this week.

FILE PHOTO: A logo of Macau junket operator Suncity Group is seen at a gaming fair in Macau, China November 18, 2015. REUTERS/Bobby Yip

The report by Economic Information Daily, was the first time a Macau junket has been singled out for online gaming activity and comes as China faces slowing economic growth and seeks to keep a lid on capital outflows.

Gambling is illegal in mainland China apart from in the special administrative region of Macau where Chinese nationals are able to bet in casinos.

Suncity enabled Chinese players to bet through online casinos in the Philippines and Cambodia and utilised underground banks to move capital out of the country, the report.

“The annual amount bet through online gambling in the mainland is more than one trillion yuan ($145 billion), equivalent to nearly twice the annual income of China’s lottery,” the report said.

Suncity said in a statement that it didn’t operate any online gaming business and all its operations were permitted under local government regulations.

Macau’s gaming regulator said in an email to Reuters that online gambling in Macau is illegal and if there were violations of local laws and regulations, outside of the former Portuguese colony, it would affect the qualifications of the junket operators and the bureau would “take serious action.”

Suncity’s publicly listed entity in Hong Kong, Suncity Group Holdings, does not include its junket operations. Junket operators are middlemen who bring high rollers to play, extending them credit and collecting on their debts.

The group’s other ventures include an equity stake in a $4 billion casino project in Vietnam together with VinaCapital, a Vietnamese investment management and real estate firm, and Hong Kong-based VMS Investment Group. The project is due to open this year.

Alvin Chau, the 45-year-old founder of Suncity, has grown the company from operating a high roller table in Wynn Macau’s casino in 2007 to a sprawling conglomerate with businesses ranging from property to autos and thousands of employees.

Chau in June became chairman of Summit Ascent Holdings, which controls a casino in Russia’s Vladivostok, after Suncity increased its stake in the company to 30 percent.

Eager to shed the industry’s shady image and avert scrutiny from regulators, particularly in the United States which alleges that many junkets have ties to organized crime and facilitate illicit money flows, companies like Suncity have tried to diversify into industries such as dining and film.

Reporting by Farah Master; Editing by Shri Navaratnam & Kim Coghill