29 Nov 2021
Macau Casino Shares Plummet after 11 Arrests Were Made
The Index Today
Stocks of Macau casino saw a sharp drop on Monday after 11 people were arrested for having links to cross-border gambling and money laundering.
It is believed that the founder of the gaming hub’s junket operator was among those who were arrested. MGM China shares went down 11% whereas Wynn Macau slid 9%. Sands China saw shares drop by 6% as investors showed worry regarding the near-term potential loss and long-term loss.
Sunctity is a junket operator which helps bring in high rollers at casinos and provides credit extension. Alvin Chau, the founder of Sunctity is believed to have been arrested as well. Authorities in Macau have taken him in for questioning. The arrest warrant was issued on Friday after accusations of illegal gambling came forward.
Carlos Lobo, a gaming consultant in Macau said, “Sunctity accounts for over 50% of junket revenue in Macau, which accounts for roughly 50% of gaming revenues, so Sunctity accounts for 25% of gaming revenues. The impact on the gambling industry is huge, but Sunctity is no longer too big to fail, the system will not collapse.”
According to Macau police, the 11 people arrested were linked to allegations of establishing overseas gambling platforms and participating in illegal activity. Authorities in Wenzhou believe Alvin Chau created a junket network to enable people to gamble on overseas platforms. He is also accused of enabling cross-border fund transfers. Sunctity group has a market value of HK$1.7 billion and has trade suspended currently. The valuation plummeted 165% over the year due to coronavirus restrictions.