Macau Casinos Decline Appeal in Suncity Case, Facing Setback in Bid for Damages

Macau's casinos have decided not to appeal a recent court ruling that stated the five gaming companies operating within the Chinese Special Administrative Region (SAR) have no legal grounds to seek financial damages from Suncity Group and its founder, Alvin Chau. Chau, once a prominent figure in Macau's VIP junket industry, was arrested in November 2021 and later found guilty of 162 charges, including fraud, illegal gambling, and criminal association, resulting in an 18-year prison sentence.

The prosecution successfully argued that Chau ran illegal side gambling operations through his Suncity junket group. Macau casinos, seeking to recover losses from the scandal, including Wynn Macau, Galaxy Entertainment, MGM China, Sands China, and SJM Resorts, filed lawsuits. However, a recent ruling by the Court of Second Instance, Macau's second-highest court, concluded that the casinos had no legal basis to pursue financial recuperation.

Suncity's illegal side bets were found to have cost the SAR government at least HK$8.2 billion (US$1.1 billion) in tax revenue between 2013 and 2021. During the heyday of Macau's gaming industry, casinos collaborated with junket groups like Suncity, providing VIP facilitators with commissions based on a percentage of the casino's winnings for bringing high-profile guests to their properties.

The legal outcome marks a setback for the casinos, with Wynn Macau, Galaxy, MGM, Sands, and SJM Resorts collectively seeking millions in damages. The ruling adds to the challenges faced by Macau's gaming industry, which has seen a decline in VIP junket operators, with most fleeing the region due to increased scrutiny and regulatory measures. The Macau SAR Government, aligning with Beijing's directives, has imposed restrictions, limiting the number of licensed junket operators to 50 per year.

As a result of the crackdown, the number of registered junket groups conducting business in Macau has dwindled to less than 40, down from over 200 before the regulatory interventions. The recent legal decision reinforces the changing landscape for Macau's casinos, prompting a reevaluation of their strategies in the wake of evolving regulatory dynamics.

By fLEXI tEAM