Arrest Of Gambling King Shatters Peace In Macao

The arrest of a prominent Macao casino CEO Alvin Chau on Saturday has shattered the territory’s gambling-dependent economy— and it comes as anti-corruption campaigns and purges continue throughout China, James Palmer reported for Foreign Policy.

Photo Insert: Macao police transfer a suspect connected to the case of Alvin Chau Cheok-wa to custody.

As Suncity Group CEO, Chau was known as the “junket king” for his skill in steering high-rollers, the ultra-rich who make up 15 percent of Macao’s casino earnings, into his VIP rooms. But that put Chau on dangerous ground.

Macao, a former Portuguese territory, is close to Hong Kong, where gambling is legal. On the mainland though, gambling is illegal, and while it remains a common practice, it is becoming far less tolerated.

Chau reportedly admitted organizing cross-border gambling and illegal virtual gambling. Suncity’s shares plummeted by 48 percentage points. Shares in other casino operators have dropped by 5 to 10 percentage points as tougher times are anticipated for the industry.

COVID-19 regulations have made travel to the gambling hub difficult, and shares were down by between 23 and 56 percentage points. In 2019, gambling revenue in Macao was $3 billion a month. Now, it’s between $500 million and $1 billion a month. These are hard times for a once-booming city.

Macao’s growth rate between 1999 and 2016 averaged an astonishing 12 percent. Over the same period, the number of mainland visitors went from 800,000 to 17 million a year. But even pre-COVID-19, the city was in a recession, and in 2020, the economy crashed, dropping in size by 56.3 percent.

That was countered by rapid recovery at the start of 2021. There was optimism that tourism and gambling would make a comeback this year, but new regulations and the spread of the delta and omicron variants are likely to kibosh those hopes.

The Macao casino industry is also deeply intertwined with organized crime. Hong Kong and Macao’s triads attempted to move onto the Chinese mainland in the 1980s, when China started to open up but were rebuffed by the power of CCP officials already involved in protection rackets.

They began instead to act as cross-border enforcers, ensuring debts were run up by mainland gamblers who skipped the island before collections were repaid, with a cut going to triads and mainland gangsters and officials.

CCP leaders evidently have no moral problem with organized crime abroad; the party has strong relationships with both the Hong Kong triads and with similar groups in Taiwan, using them as proxies to attack democratic leaders.

In Australia, a 2019 investigation found ties among organized crime, Chinese intelligence, and local casinos.

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