Macau Junket King Arrested for Money Laundering in Chinese Gambling Crackdown

December 6, 2021
18,123 Views
Andrew Burnett

Macau was shocked last week by the arrest of Suncity Group CEO Alvin Chau, the infamous “junket king” suspected by Chinese authorities of illegal cross-border gambling and money laundering.

Chau’s arrest is the first time the crackdown on gambling by Chinese Premier Xi Jinping has seen a high-profile figure in the gaming industry arrested.

Share prices in Suncity tumbled by as much as 20% on the back of the news, which also saw Chau step down as chairman, amid fears that China has more anti-gambling attacks planned.


The arrest warrant

47-year-old Chau, full name Alvin Chau Cheok-wa, was arrested along with 10 others by Macau police on Saturday, one day after an arrest warrant was issued in the city of Wenzhou.

Chau was described by police as the “mastermind” behind an illegal gambling syndicate which used junket operations in Macau to set up an overseas betting platform targeting mainlanders.

As much as $200billion a year is believed to pass through Macau from the mainland, where gambling is illegal, with police claiming Chau’s syndicate’s share of the money was laundered via VIP gambling accounts and underground banks.

According to the Wenzhou City Public Security Bureau on its Weibo account, Chau admitted to establishing the betting platform but declined to provide further information.

Chau is believed to have set up an asset management company in mainland China to help gamblers make cross-border fund transfers.


The Crime Syndicate

The authorities have described his operation as a “crime syndicate” with a reported 199 shareholder-level agents, more than 12,000 gambling agents, and over 80,000 punter members.

According to the WCPSB, "The amount of money involved was exceptionally large, seriously damaging our country's social management order."

Officers seized computers, servers, phones and 3 million Petacas (HK$2.9 million) in the weekend operation after a two-year long investigation.

Jeremy Douglas, Southeast Asia and Pacific representative for the United Nations Office on Drugs and Crime, told Reuters, "Chau's arrest warrant is no doubt sending shockwaves through organised crime in Hong Kong and Macau, but also Cambodia, Laos and the Philippines.”


The Junket Masters

Macau has long used junket operators to facilitate the gambling needs of China’s elite, including members of the ruling Chinese Communist Party.

With Chinese gamblers from the mainland unable to transfer large sums of money for their visits to Macau and other gambling hotspots, the junket operators extend “credit” that often includes travel, accommodation, cash and gaming credit, as well as providing other forms of entertainment.

The gamblers then settle their debts back in mainland China, with the Triads having a long history of enforcing payment on those who default.

With all this business being unlicensed, tales of money-laundering, violence, sex trafficking and other aspects of organised crime are tied up in the lucrative trade, hence the current Chinese governments’ crackdown.

In the current case involving Chau, his syndicate is described as “granting high credit, promoting the gambling business, providing transportation services, and technical support.”


The Australian Connection

It is not only Macau that has been in the headlines for arrests connected to junket operators. Australia’s Crown Resorts casino empire was rocked when nineteen employees in China were jailed for illegally promoting gambling.

Those unprecedented detentions in 2016 included Jason O’Connor, the head of Crown’s VIP International team, and the fallout not only saw the company’s stock fall 10% but also saw the group’s shareholders launch a legal action against the company.

As we reported just last month, Crown resorts eventually settled the lawsuit for AU$125m (US$94m).

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