Macau junket king places a bet on Japan as slowdown in world’s gambling hub pushes Suncity to look elsewhere for growth

Suncity has agreed to pay US$47 million for 51 per cent of a 27-acre parcel of land on Miyako Island in southern Japan’s Okinawa island chain

The land, currently zoned as farmland, will be reclassified for building a resort and hotel

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The Sunayama beach on the island of Miyako, part of the Okinawan island in southern Japan, in summer. Photo: Shutterstock

Published: 8:31pm, 4 Sep 2019Updated: 10:03pm, 5 Sep 2019

Suncity Group Holdings Limited, the listed arm of Macau’s biggest VIP junket operator Suncity Group, has agreed to pay US$47 million for 51 per cent of a 27-acre parcel of land on Miyako Island in the Okinawa Island chain, according to a recent filing made with the Hong Kong Exchange.

Suncity, widely estimated to control half of the total VIP gaming industry in the world’s gambling hub, has been aggressively snapping up casinos around Asia to diversify its income source, as it’s been squeezed by a slowdown in Macau’s VIP business and increased oversight by mainland China’s central government.

In April, Suncity founder and Chairman Alvin Chau made US$191 million credit facility available to his own company for acquisitions. Chau’s net worth has been estimated by Wealth-X at no less than US$2 billion.

Japan has become a target for casino operators since the country passed a law allowing casinos to operate in July 2018. Three licenses are on offer in the first seven years, and major casino operators, including Melco, Galaxy Entertainment Group, Las Vegas Sands and Malaysia’s Genting Berhad have all signalled interest, though the first casinos are not expected to open before 2025.

Suncity Group’s founder and Chief Executive Officer Alvin Chau (left) and Managing Director Andrew Lo Kai Bong (r) in an undated handout photo. SCMP Pictures

The gross revenue of Macau’s VIP gambling business rose 10 per cent last year to US$21 billion, but have fallen by 14.5 per cent this year, as high rollers have stayed away. That has pushed Macau’s casino operators to shift their focus to mass market gamblers, while the local authorities seek to broaden the special administrative region into a family-friendly tourist destination.

Suncity’s interim revenue fell 32.7 per cent to US$43 million, with net losses at US$175.4 million, according to its first-half financial report.