Macau Casino Stocks Tumble After Top Gambling Boss Arrested  

Macau Casino Stocks Tumble After Top Gambling Boss Arrested  

Shares in Macau casino operators fell Monday after a top gambling boss was arrested over illegal virtual betting activities, according to Bloomberg

Macau’s judiciary police announced they arrested Suncity Group Holdings Ltd. CEO Alvin Chau after he established overseas gambling platforms and carried out illegal virtual betting activities. Chau, along with others, admitted to some wrongdoing but overall declined to cooperate with authorities. In total, a group of eleven people was arrested. 

Chau’s arrest is the first time a high-profile casino boss has been targeted. The news sent casino shares in Hong Kong tumbling in the overnight session. MGM China Holdings Ltd. dropped 10%, while Wynn Macau Ltd. sank 7.8%. Sands China Ltd. and Galaxy Entertainment Group Ltd. fell 5%. Shares of Suncity were halted.

In September, Beijing cracked down on casino operators with increased government supervision. The authorities intended to increase oversight on the world’s largest gambling hub and deter money laundering and currency outflows. Macau gambling is traditionally how the Chinese launder money out of the country, which now means only cryptos are left to bypass China’s firewall. 

The arrest of Chau could jeopardize Suncity’s junket license, up for renewal in early 2022. Suncity accounts for 40% of the gambling hub’s high-roller betting volumes. 

Evidence presented during a press conference on Sunday included about $385,000 linked to the formation of the criminal group, money laundering and illicit gambling. The suspects also transferred illegal capital via accounts in Suncity’s VIP rooms in Macau and underground banks. – Bloomberg

Macau casino shares have been beaten down over the past year. JPMorgan and Citigroup said the arrest would harm investor sentiment and present further downside in casino shares. 

Citi’s George Choi wrote that further declines “could present an enhanced buying opportunity.” He cited several positive catalysts for the industry, including the potential reopening of the border with Hong Kong. 

Investors have been spooked all year by Beijing’s crackdown on sectors ranging from education to big tech. In Citi’s view, buying the dip in Macau gaming stocks could be nearing.

Tyler Durden
Mon, 11/29/2021 – 07:36

via ZeroHedge News https://ift.tt/32y2NdG Tyler Durden

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