Asia’s leading casino junket operator Suncity Group is refuting a Chinese media report that claims its online gambling operations are a scourge on Chinese society.
A recent report by Chinese state-run media claims to have shone a light on Suncity’s pursuit of gambling licenses in Cambodia and the Philippines, and the subsequent launch of “incredibly large” online gambling operations “almost exclusively” targeting customers on the Chinese mainland.
The report claimed that Suncity was “the largest poppy flower” among Chinese-facing online gambling operations, a potentially ominous charge given the government’s ongoing views of the negative effect of the 19th century Opium Wars on Chinese society. The report estimated Suncity’s annual online gambling turnover in China at around RMB1t (US$145b), noting that this sum was twice the sales of the state-run Welfare Lottery.
The report singled out Suncity’s ‘proxy betting’ operations, in which a VIP gambling room operator either livestreams the table action to a mainland gambler watching on their computer, or who places wagers over the phone through a trusted confidant seated at the table who in turn relays real-time card information to the bettor.
The report also accused Suncity of using illegal underground banking to transfer funds out of China to its gambling operations. The report claimed that gambling had caused “great harm to China’s social order and financial authority” and the illegal outflow of capital “seriously jeopardizes social stability.”
On Monday, Suncity Group issued a statement saying it “strongly condemns” the report’s use of “false” information and “mostly conjectures” to make its point. Suncity added that it “does not operate any online gaming business” and that its junket operations were “all licensed, legitimate and regulated” by the government in the jurisdictions where it operates.
Suncity Group Holdings, a Hong Kong-listed affiliate of the junket operation that includes hospitality business and a growing stake in several casino projects in Asia-Pacific countries, saw its share price tumble nearly one-fifth on Tuesday. Both Suncity Group and Suncity Group Holdings are controlled by Alvin Chau.
It’s unclear whether Chau has done something to annoy the powers that be or whether this is simply a shot across the bow of all China-facing gambling operators that have at least some physical presence in the country. The Sanford C. Bernstein brokerage noted that this appeared to be the first instance of state-run media singling out a junket operator for illegal online gambling activity.
