Suncity to close all Macau VIP rooms from Dec. 1st pending restructuring

Suncity VIP room
Suncity VIP room

Suncity Group will close all of its VIP rooms in Macau from midnight on Weds. Dec 1st ahead of a planned restructuring of the business, local media reports.

No further details were immediately available.

The closures follow the weekend arrest and detention of CEO Alvin Chau on suspicion of organizing illegal gambling and money laundering. The government said it has been investigating Chau since 2019 on suspicion he was leveraging his VIP rooms in Macau to build an online gambling platform in the Philippines that was soliciting Mainland Chinese to gamble.

The closure of the lounges will be a major blow for Macau’s VIP revenue. Suncity is by far the largest junket operating in the market with a 45 percent share of the total prior to Covid, according to figures from Bernstein Research.

However, the firm noted that its share had declined markedly in recent months, down to closer to 20 percent.

“Part of the decline stems from their prior aggressive expansion and building a riskier junket business model compared to some other Macau junkets that have taken a more cautious approach,” it said.

Although stocks in Macau operators have fallen sharply following the arrest of Chau, analysts said the loss of the VIP market, which had been declining in importance will not have a major impact on profitability.

VIP business now accounts for about a third of the total and is lower margin than the mass market and premium mass segment.

Some analysts have expressed concern that the fallout from the Suncity case may have repercussions for the premium mass business too, which would be a far greater blow for Macau.