- Chinese media targets Suncity Group for possible offshore gambling
- Suncity counters claims and threatens legal action
- Analysts still cautious about what the ramifications can be
Suncity Group has responded to Chinese media accusations that the company has been running offshore online gambling. The junket operator has threatened legal action.
Chinese Newspaper Accuses Suncity of Running Offshore Gambling
Caught in controversy, Suncity Group, one of the largest Asian VIP casino operators, has denied allegations that the company has been supporting online gambling businesses or has been involved in running such subsidiaries.
Suncity Group is responding to accusations that circulated in Chinese Media on Monday, July 8. Based on those report Suncity has used proxies to allow offshore online casinos gain access to Chinese customers.
The news comes directly from Economic Information Daily, which is under the control of the national news agency Xinhua. According to EID, Suncity Group canvassed junket room patrons in Macau and offered to sign them at online casinos located offshore. This allowed Suncity to allegedly move capital out of the country.
Suncity Responds to the Accusations
Falling out of grace with the state is a proven formula for wrecking business. Even China’s largest tech company Tencent, which also provides solutions to online casinos and card rooms, has been forced to shut down or stop developing a number of its products.
In light of the inexorable stance of the state against flaunting the law, Suncity has issued a Statement of Clarification which addressed the issue head on. Sun City stated that under the Junket Promoter License that has been obtained under Macau’s law, the company had “no possession of any casino and gaming tables, neither does it operate any online gaming business”.
Suncity also pointed out that the key areas of interest for the group remained the VIP gaming services along with the hotel and integrated resorts. The company called the information circulated by EID wrongful, butting heads with the state media.
More specifically, Suncity Group has argued that the “information could contain subjective speculation and therefore has led to reputational damages to the Company and its shareholders”.
What Do Observers Say?
Global asset management firm Stanford C Bernstein commented earlier this week that this had been the first time that a Chinese national media had accused a junket operator from running an offshore gambling business.
The firm said that it was too early to see any consequences from what had happened, but analysts also expressed the cautious opinion that China may be warning junket operators to watch out about any offshore operations they might be running, which in turn means that companies may soon see the government intervene more.
Suncity Group’s portfolio has multiple investments on its portfolio including the Vietnam IR Hoiana (34%) and Summit Ascent Holdings which in turn owns the famous Russian casino property, Tigre de Cristal.
Responding to the accusations leverage by EID, Suncity noted that it wouldn’t hesitate to seek legal action to protect its reputation.