Yesterday evening, Macau Legend Development said in a filing to the Stock Exchange of Hong Kong that Chan Weng Lin, its co-chairman and chief executive, had been detained by Macao Judicial Police.
Macau Legend shares tumbled as much as 29.8% in early trading today in Hong Kong.
As of late morning, the shares were down 19.3% from Friday’s close at 46 HK cents.
Also known as Levo Chan, the businessman is chairman and controlling shareholder of Tak Chun Group, which analysts say was second only to Suncity Group in market share in 2019 among Macau junket agents.
Alvin Chau, head of Suncity, was charged two months ago with unlawful gambling operations, money laundering and leading a criminal group.
Police said yesterday that Chan was suspected of committing the same crimes, according to local media.
Junket agents have long taken care of attracting high rollers from China and elsewhere to Macau, smoothing the way with travel and financial arrangements.
For the majority coming from mainland China, the agents helped players get around currency controls by extending credit and then settling wins and losses after the gamblers returned home.
Until a few years ago, the junkets generated a majority of gambling revenues in Macau.
Macau Legend said that this weekend’s arrest “relates to the personal affairs of Mr Chan” and that it did not expect it “to have a material adverse impact on the daily operations of the group”.
Macau Legend runs the casino in the Landmark Macau hotel and owns the Macau Fisherman’s Wharf complex, which includes another three hotels and two casinos.
Chan took control of the company in 2020.
Both Tak Chun and Macau Legend affiliate New Legend VIP Club were among included on a list of 46 approved junket licensees issued Wednesday by the Macau Gaming Inspection and Coordination Bureau.
The bureau said it was still reviewing 29 more applications that were not initially complete.
Last year, 85 agents received annual licences.
Suncity previously operated VIP rooms within the properties of all six of the city’s casino operators, but all were closed last month.
Tak Chun said in December that two unnamed operators had also notified it that they would be shutting its rooms in their casinos.
As of yesterday evening, its Facebook page and website were no longer visible.
The company did not immediately respond to requests for comment.
Last month’s abrupt shutdowns of most of the city’s junket rooms, on top of new travel restrictions due to Covid-19 outbreaks in China, have caused VIP gaming revenues to plummet, forcing the casinos to rely more on mass-market cash players.
According to Bernstein Research gaming analyst Vitaly Umansky, daily VIP betting volumes between Jan 1 and Jan 23 reached only half the already-depressed level seen over the same period of December.
Almost all recent VIP bets came from direct clients of the casinos, rather than junket customers.
Like Suncity, Tak Chun has been expanding overseas, opening VIP rooms in casinos in the Philippines, Cambodia and Vietnam.
Macau Legend has also invested in a casino hotel in Laos and is developing a gambling resort in Cape Verde.
Under a draft gaming bill that received preliminary backing from Macau’s legislative assembly last week, each licensed junket will be allowed to work with only one casino operator while being barred from splitting gambling revenue with it or running dedicated VIP rooms within its properties.
Last week, a senior Macau Legend executive said the company planned to seek rights to operate casinos when the city tenders for six gaming concessions when the bill is passed.
The city already has six incumbent operators.
Suncity also previously expressed interest in bidding.
The pending gaming bill would affect Macau Legend by requiring that all of an operators’ casinos be located within their own properties.
Macau Legend’s casinos are operated under the license of SJM Holdings, but the bill would allow a three-year transition period to resolve non-complaint situations. SJM has held a small stake in Macau Legend.