The biggest junket operator in Macau will close its rooms from Dec. 1 and stop paying some employees from the same date, said the people, who asked not to be identified as they’re not authorized to speak publicly. Some employees were also told that their salaries for November may not be paid on time, said the people, adding that it wasn’t clear if the closures are temporary or permanent.

The salary suspensions affect at least one third of Suncity’s workers in Macau, one of the people estimated.

Suncity staff cannot currently access company systems such as email and chatrooms due to the police investigation, two of the people said. The group’s website has also gone offline.

Junket King’s Arrest Spurs Selloff as Key Macau Market Targeted

Suncity did not respond to requests for comment. The company said earlier Tuesday that its business and operations would be adversely affected if it loses financial support from CEO Alvin Chau.

Since Chau was detained over the weekend, the company’s Hong Kong-listed arm Suncity Group Holdings Ltd. which doesn’t include its junket operation, has plunged nearly 50%, while a Bloomberg gauge of casino operators has dropped 10.4%.

The swift downfall of an organization that once saw HK$180 billion ($23 billion) bet by high rollers in its VIP rooms in a single month underscores China’s intensifying crackdown in the world’s biggest gaming hub. Beijing wants Macau to shift its economy away from gambling, and it’s driving out a shadowy industry -- the junket network -- that channels some three-quarters of Macau’s roughly $3 billion in annual VIP gaming revenue.

While gambling is barred in China, junkets have long operated on the mainland by wooing Chinese punters to Macau with private jets, hotel suites and, crucially, credit lines to gamble in Hong Kong dollars that can be repaid in Chinese yuan or with assets.

Suncity accounted for more than 40% of Macau’s junket market, or about 15% of the city’s gaming revenue in 2019, according to JPMorgan Chase & Co. analysts including DS Kim. They predict that Macau’s junket-driven VIP revenue pile could contract by half in the coming weeks. By 2023, the VIP sector may only drive about 4% of casino operators’ earnings, they estimated, compared to 15% in 2019.

News of Suncity’s VIP room closures and staff furlough was first reported by local media outlets Hong Kong Economic Times and HK01 on Tuesday.

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