Macau Ex-Junket Boss Alvin Chau Sentenced to 18 Years Prison

(Bloomberg) -- Macau’s ex-junket king Alvin Chau was sentenced to 18 years in prison in the gaming hub after being found guilty of charges including criminal association, capping the downfall of the flamboyant former industry tycoon.

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Chau was found guilty of criminal association, illicit gambling and fraud, according to statement issued by a Macau court on Wednesday.

The court also ordered Chau, together with a handful of other individuals involved in the case, to pay around HK$6.5 billion ($830 million) to the Macau government, and more than HK$2.1 billion in compensation to a number of the city’s casino operators.

The former chairman of Suncity Group, Macau’s largest junket operator, was a leading light in a lucrative industry that brought in high rollers from mainland China and extended credit to them. He was arrested in November 2021 for conducting illegal gaming activities. The focus of authorities’ investigation centered around ‘under-the-table’ betting, a system in which gamblers wagered multiples of what they officially bet via a shadow banking system established by Chau’s group.

Since 2013, Chau’s group had handled almost HK$824 billion in such parallel gambling money, making an illegal profit of HK$21.5 billion, according to prosecutors. That resulted in a HKD$8.26 billion loss in tax revenue for the Macau government, media outlet GGR Asia reported.

Read more: High-Roller Crackdown Leaves World’s Biggest Gaming Hub on Brink

The rise and fall of Chau tracks Beijing’s tightening grip on what was once the world’s biggest gambling hub. After decades of easy profit and a reputation for helping China’s richest funnel money overseas, junkets have faced a hard crackdown. Authorities have arrested junket bosses and passed a new gaming law to increase oversight on casinos in an effort to stop capital flight and accelerate the enclave’s integration into the gambling-free Chinese economy.

Macau’s casino industry has also been hammered by strict Covid rules that kept many Chinese visitors away. Tourists are only recently returning after China abandoned its Covid Zero policy last month and opened up, yet the crackdown on VIP gamblers and the country’s slowing economy means travelers are spending less, adding uncertainty to the casino industry’s outlook.

China’s crackdown has roiled the gambling hub. In January last year, authorities arrested Chan Weng Lin, former chairman of another major junket operator Tak Chun Group. And mainland China has also tightened its visa policy for Macau in order to curb frequent gamblers’ visits.

Cutting Ties

Suncity has sought to cut ties with Chau. In July, listed arm Suncity Group Holdings Ltd. — which doesn’t run junket businesses — was taken over by executive director Andrew Lo, and later renamed LET Group Holdings Ltd.

Since starting Suncity in 2007, Chau developed the group into Macau’s dominant junket operator and branched out into overseas casinos from the Philippines to Russia, as well as entertainment, real estate and travel. His early career has been shrouded in mystery while his personal life became tabloid fodder.

He was formerly associated with notorious Macau triad boss, “Broken Tooth” Wan Kuok-koi, according to an Australian state government inquiry into Crown Resorts in 2020, reported by the Sydney Morning Herald. Chau even found his way into China’s political scene, serving as a member of the Guangdong provincial committee of China’s top advisory body, the Chinese People’s Political Consultative Conference between 2013 and 2017.

Before his arrest, Chau had been increasingly vocal about his patriotism for mainland China. In an interview with state media in 2020, Chau talked about how his entertainment unit co-funded the 2018 action blockbuster Operation Red Sea, about the Chinese navy evacuating compatriots from a civil war-torn fictional North African country.

(Updates to add details in second and third paragraphs.)

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