People familiar with the matter revealed that LET Group Holdings Ltd, which plays a major part in Macau billionaire Alvin Chau’s business, has fully disassociated itself from the Hoiana resort. The insiders, who asked not to be named because the matter is still private, shared that the move would provide the flagship investment firm of the Cheng family – Chow Tai Fook Enterprises Ltd. – with the opportunity to take over the control of the resort’s operations.
Hong Kong-based Cheng family has officially assumed control of the Hoiana casino resort in Vietnam, with the takeover constituting a significant development in the Asian gambling landscape. The resort, situated in close proximity to Da Nang, a port city in Vietnam, was previously operated by the Suncity Group, the gambling business of the currently-jailed Alvin Chau.
The Hoiana resort operates as a joint venture between Chow Tai Fook, LET Group, and Vina Capital, an investment management company. The resort features a massive number of amenities, including a casino with more than 350 gaming machines and 140 gaming tables, Rosewood- and New World-branded Cheng family hotels, as well as a luxurious golf course.
For the time being, the construction of some additional facilities in the resort is still ongoing, bringing the overall investment in the resort to about $4 billion.
The Cheng Family Tries to Distance Itself from Former Alvin Chau-Led Junket Operations in Macau
The takeover of the Hoiana resort from the Cheng family has come in the aftermath of the legal troubles faced by Mr. Chau, which eventually resulted in his imprisonment in Macau. Alvin Chau, who used to run the most prominent junket operator in Macau, was the leading force behind an extremely profitable industry that attracted high-rollers from mainland China through the provision of special benefits and generous gambling credits. However, the more restrictive regulatory approach of the Beijing Government seriously hurt the entire sector, with mainland China lawmakers citing concerns associated with potential money laundering and capital overflows.
After Mr. Chau’s arrest, the listed unit of his gambling empire – Suncity Group Holdings Ltd. – became the subject of a transformation under the leadership of Andrew Lo, the company’s executive director. The company was rebranded to LET Group and has been focused on distancing itself from junket operations.
The management shift in the Hoiana resort corresponds to a broader trend among so-called junkets in Macau. The higher taxes and stricter regulations issued by the Government of mainland China have forced these operators to start actively searching for other opportunities for growth in Southeast Asia, with Vietnam standing out as one of the most attractive destinations in the region due to its more relaxed gambling regulations. The country also provides junket operators with the chance to share their high-roller revenue with casinos, a model that was officially abandoned in the gambling hub of Macau after the latest crackdown measures unveiled by Beijing.
The tourism industry of Vietnam is currently experiencing a post-Covid-19 boom, with visitor arrivals in the country returning to about 66% of the levels before the coronavirus pandemic over the first half of the year. Previously, Chinese tourists accounted for almost one-third of Vietnam’s visitors, but their number is now expected to grow further, mostly because of a shortage of international flights. As for the country’s casino sector, Vietnamese law currently bans local residents from gambling in most facilities, so local casinos mostly rely on high-spending foreign players.
Vietnam has not been the only expansion target of the Cheng family that has also eyed Australia as a market for potential growth. The Cheng family has already become one of the key investors in the Star Entertainment Group. As part of a collaboration with Far East Consortium International Ltd., the family is currently jointly developing an impressive gambling resort in Brisbane.
