Macau Legend shares fall over 20 percent after CEO's arrest
HONG KONG : Shares of Macau Legend, which owns and operates
a casino resort in Macau, fell more than 20per cent to an all-time low on
Monday after its chief executive was arrested and detained by police in the
world's largest gambling hub.
CEO Chan Weng Lin's arrest comes as authorities have stepped
up a crackdown on illicit capital outflows from the Chinese mainland, where all
forms of gambling are illegal, and after the high profile arrest of Suncity
boss Alvin Chau in November.
Macau Legend reported Chan had been arrested in a statement to the Hong Kong stock exchange on Sunday, adding it did not expect any adverse impact from this on its daily operations.
Chan owns around a third of Macau Legend, which runs three
casinos under a service agreement with SJM Holdings and owns the Fishermans
Wharf, an entertainment complex near the Macau ferry terminal. He is also
chairman of Tak Chun Group, Macau's second-biggest junket operator after
Suncity.
Tak Chun did not immediately respond to a request for
comment. Reuters was unable to reach Chan separately.
Apart from Chan, police have also arrested one other man for
alleged illegal gambling and money laundering.
Analysts say the arrests herald a new era of zero tolerance
of the promotion of gambling in China.
"We believe the investor base has become well aware
that VIP is no longer the segment that matters," George Choi, an analyst
at Citibank in Hong Kong said in a note on Monday.
"The Macau government's recent clarifications on
amendments to the gaming law signal that the government remains supportive of
sustainable development of the mass segment."
The mass segment refers to the mass market gamers, or
mom-and-pop players, not the high rollers.
Junket operators have traditionally offered easy credit to
mainland Chinese high rollers, who play in Beijing-ruled Macau's casinos and
collect on their debts using underground financing channels.
Now nearly non-existent, the opaque VIP industry made up
more than two-thirds of Macau's gambling revenue until just a few years ago.
Police said the latest arrests were linked to the Suncity
case in November as the two groups - Suncity and Tak Chun -worked together,
engaging in "illicit and criminal activities".
Suncity and Tak Chun have been the top two junket firms in
Macau, employing thousands, but data from Macau's gambling regulator shows the
number of licensed junkets has shrunk 46per cent over the past 12 months.
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