FILE PHOTO: Casinos are seen in a general view of Macau, China October 8, 2015. REUTERS/Bobby Yip
January 31, 2022
HONG KONG (Reuters) – Shares of Macau Legend, which owns and operates a casino resort in Macau, fell more than 20% to an all-time low on Monday after its chief executive was arrested and detained by police in the world’s largest gambling hub.
CEO Chan Weng Lin’s arrest comes as authorities have stepped up a crackdown on illicit capital outflows from the Chinese mainland, where all forms of gambling are illegal, and after the high profile arrest of Suncity boss Alvin Chau in November.
Macau Legend reported Chan had been arrested in a statement to the Hong Kong stock exchange on Sunday, adding it did not expect any adverse impact from this on its daily operations.
Chan owns around a third of Macau Legend, which runs three casinos under a service agreement with SJM Holdings and owns the Fishermans Wharf, an entertainment complex near the Macau ferry terminal. He is also chairman of Tak Chun Group, Macau’s second-biggest junket operator after Suncity.
Tak Chun did not immediately respond to a request for comment. Reuters was unable to reach Chan separately.
Apart from Chan, police have also arrested one other man for alleged illegal gambling and money laundering.
Analysts say the arrests herald a new era of zero tolerance of the promotion of gambling in China.
“We believe the investor base has become well aware that VIP is no longer the segment that matters,” George Choi, an analyst at Citibank in Hong Kong said in a note on Monday.
“The Macau government’s recent clarifications on amendments to the gaming law signal that the government remains supportive of sustainable development of the mass segment.”
The mass segment refers to the mass market gamers, or mom-and-pop players, not the high rollers.
Junket operators have traditionally offered easy credit to mainland Chinese high rollers, who play in Beijing-ruled Macau’s casinos and collect on their debts using underground financing channels.
Now nearly non-existent, the opaque VIP industry made up more than two-thirds of Macau’s gambling revenue until just a few years ago.
Police said the latest arrests were linked to the Suncity case in November as the two groups – Suncity and Tak Chun -worked together, engaging in “illicit and criminal activities”.
Suncity and Tak Chun have been the top two junket firms in Macau, employing thousands, but data from Macau’s gambling regulator shows the number of licensed junkets has shrunk 46% over the past 12 months.
(Reporting by Donny Kwok and Farah Master; Editing by Himani Sarkar)
Source: One America News Network
