GGRAsia – Suncity Macau tender hopes hurt by online row: scholar

Suncity Macau tender hopes hurt by online row: scholar

Jul 11, 2019 Newsdesk Latest News, Macau, Philippines, Rest of Asia, Top of the deck

The Suncity brand’s hopes of winning a Macau casino licence in an expected public retender process – due because the city’s six existing concessions expire in 2022 – may have been dealt a blow by allegations in Chinese mainland media that it facilitated online gambling.

So said several commentators in remarks to GGRAsia. Suncity’s ambitions for a Macau licence were stated explicitly in May in an interview by Portuguese news agency Lusa conducted with a senior Suncity Group executive.

Macau junket investor Suncity Group – a privately-held entity – had described as “false” in a Monday statement the idea that Suncity brand customers in Macau had been signed up for an app that facilitated “proxy gambling” and “online gaming” outside China. The claims had been made in a mainland media outlet called Economic Information Daily and an official Chinese news agency, Xinhua.

“For sure,” Suncity Group’s “chances to be a Macau casino licence bidder would be affected,” because such allegations “create a bad record,” said nonetheless Wang Changbin, director of the Gaming Teaching and Research Centre at Macao Polytechnic Institute, in comments to GGRAsia.

Paulo Martins Chan, the director of Macau’s casino regulator, the Gaming Inspection and Coordination Bureau, had reiterated in a meeting on Wednesday with Macau’s six casino operators that online gaming within Macau was illegal.

In a meeting the same day with representatives of the junket sector, Mr Chan reminded those present that any breach of the law – even if outside Macau – could impact a junket’s suitability to hold even a Macau junket licence.

Macao Polytechnic Institute’s Mr Wang noted to us: “Online gaming and promotion of gaming are criminal offences in mainland China, and the government is aware of its negative impact on the economy there and is concerned of how it could result in capital outflow.”

He added, regarding the issue of capital flowing offshore from China: “The Chinese government is strong on its stance as you can see in the examples of the arrest of [South] Korean gaming promoters [in 2015] and of the arrest of Crown Resorts executives [in 2016],” Mr Wang noted.

Offshore business back to Macau?

Casino industry veteran Ben Lee, managing partner of IGamiX Management and Consulting Ltd, said that the negative publicity linking online gaming to the Suncity brand could have a “chilling effect on the explosive growth” of business in the other regional jurisdictions – such as the Philippines and Cambodia – and actually be good for Macau’s casino sector, by moving gambling business back onshore.

“The fact that it’s been published as an exposé without any explicit [reprisal actions] by the authorities would seem to suggest that it is a warning to all those who may have been involved or presumed to have been involved in either online or proxy gaming in the region,” Mr Lee said in comments to GGRAsia.

Brendan Bussmann, a partner at gaming consultancy Global Market Advisors LLC, and its director of government affairs, told GGRAsia the Economic Information Daily report could have an impact on the Suncity brand’s hopes in the future competition for Macau public concessions for gaming.

Regarding an eventual retender process, a suitor’s “existing and historical activities in other markets whether that be from a land-based or even online perspective” will in likelihood be taken into consideration by the authorities, said the consultant.

He added: “Since Macau opened up casinos beyond the original monopoly, the central government has provided numerous warnings against activities it views are not aligned with the social-economic system.”

He added: “I think most operators, including junkets, know that the central government will always have an eye on activities happening in Macau, on the mainland, or elsewhere to make sure they keep on the prescribed path.”

Kwok Chi Chung, president of the Macau Association of Gaming and Entertainment Promoters, a trade body for the city’s junket firms, told GGRAsia he believed the reports in state-backed media mainly served as a warning to Macau junkets against participating in any illicit online gaming activities targeting mainland Chinese patrons.

“To a certain extent, it [the publicity] is to send out a warning in the hope Macau junkets refrain from providing any illicit online gaming services,” Mr Kwok remarked to us.

He added he was uncertain to what extent local junkets might be involved in providing online gaming services. But he acknowledged that since Macau’s casino regulator issued guidance in 2016 that it wished to see an end to so-called proxy gambling in Macau casinos, the local junket promoters have largely shifted proxy gambling operations to overseas destinations where such gaming format was – to his understanding – licensed.