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Zhou Zhuohua, founder of Macau's Suncity Group, nicknamed "Ximihua", was charged with 289 counts of illegal gambling, and the case was pronounced in the local primary court on Wednesday (January 18), convicting him of more than 100 crimes, including triad crimes, illegal gambling and fraud, and sentenced to a total of 18 years in prison.
CREDIT, GETTY IMAGES, ZHOU WAS CHARGED WITH NEARLY 300 COUNTS.
Zhou Zhuohua's case stemmed from Wenzhou, Zhejiang Province, in November 2021, when he investigated his suspected cross-border gambling crime and was approved by the Macao Procuratorate. The judicial police of the SAR took Zhou Zhuohua away for investigation and handed him over to the procuratorate for prosecution.
The arrest occurred at a time when Macau was consulting to revise the Gaming Law and prepare to rebid for casino licenses, and shortly after the 11th revision of the Criminal Law Chinese mainland criminalize "organizing participation in foreign and overseas gambling".
According to the indictment, from March 2013 to March 2021, the illegal group headed by Zhou operated "gambling bottom" in six gaming casinos, that is, privately increased the amount of gambling with leverage, gambling funds amounting to more than HK$800 billion, and earning at least RMB21.5 billion in improper benefits from it, resulting in an undercharge of gaming tax by RMB8.26 billion in the Macao SAR, and the government and a number of gaming enterprises filed claims for civil damages.
*Zhou Zhuohua and his VIP room kingdom*
Zhou Zhuohua was born in Macau on May 30, 1974, and there are reports that he, like many Macau residents born at the same time, holds Portuguese citizenship.
According to a number of Chinese media reports in Hong Kong and Macao, Zhou Zhuohua got involved in the so-called "pickpocket" lending intermediary of casinos in 1994, "peddling" lending services on the streets around casinos.
A "pickpocket" is someone who cheers up gamblers in the casino and asks for tips from winning gamblers. They are different from the "stackers", who are engaged in soliciting customers for the gambling hall and thus sharing dividends with the gambling hall.
Stacker was legalized in 2008 as a regulated lottery intermediary.
As early as 1998, Zhou Zhuohua obtained an online gaming license in the Philippines, and in 2007, he was wooed by a hotel in Macau to open a casino VIP room and establish his Suncity Group.
The Macao Daily News pointed out that Suncity Group has made a lot of money by virtue of the VIP room business, and since 2011 it has expanded its film, catering, finance, real estate, auction house, automobile industry, luxury goods, tourism and entertainment, concerts and other businesses, and in recent years, it has invested in the Philippines, Vietnam and other places to build comprehensive tourism and entertainment resorts, and expanded its business to Russia through acquisitions.
SUNCITY GROUP ADVERTISEMENT AT MACAU GRAND PRIX VENUE (21/11/2015) IMAGE CREDIT, GETTY IMAGES,
*Ximihua case: from Wenzhou, Zhejiang to Macau*
On July 8, 2019, the Economic Information Daily, a subsidiary of China's official Xinhua News Agency, reported that Zhou Zhuohua had solicited Chinese mainland gamblers to participate in overseas gambling remotely through online gambling platforms in the Philippines and Cambodia.
The report described him as "Asia's new gambling king" and said that "the annual gambling amount of Suncity online gambling in the mainland is more than one trillion yuan, which is equivalent to nearly twice the annual income of China's lottery."
He responded at the time that it was "seriously untrue" and reserved the right to pursue legal responsibility.
On November 26, 2021, the Wenzhou Municipal Public Security Bureau in Zhejiang Province issued a case circular, announcing that it had received approval from the local procuratorate to arrest Macau resident Zhou Zhuohua, accusing him of "committing the crime of opening a casino in China" and "urging him to turn himself in as soon as possible and seek leniency."
According to the Wenzhou police, since 2007, Zhou Zhuohua has developed Chinese mainland domestic personnel as shareholder-level agents and gambling agents, organizing Chinese citizens to gamble in overseas gambling halls contracted by him and participating in cross-border online gambling activities; Set up an asset management company in China to provide gamblers with gambling chip exchange services, help collect gambling debts, and assist customers in cross-border payment of funds; Use illegal channels such as underground banks to provide fund settlement services to gamblers.
According to local police, as of July 2020, the cross-border gambling criminal group led by him had developed a total of 199 shareholder-level agents, more than 12,000 gambling agents, and more than 80,000 gambler members in Chinese mainland.
A woman named Zhang Ningning was listed as one of the backbones, and according to Hong Kong media reports, she was a Hong Kong resident.
In his final statement, Reuters, Chow Zhuohua highlighted that its enterprises have brought great economic contributions to Macau.
The day after the release of the case report, the Macao judicial police took Zhou Zhuohua away for investigation. The HKSAR government issued a statement confirming that it acted "on the basis of evidence obtained from previous criminal investigations" after "receiving notification from the relevant Mainland authorities".
There is no mutual criminal justice assistance agreement between Macau and Chinese mainland, and Macau media have asked the authorities why they arrested Zhou Zhuohua.
The police responded that the Australian side had opened a case for investigation based on intelligence as early as August 2019, and countered that it did not know the information reported by the Wenzhou police.
The police also said that 11 suspects, including "a 47-year-old male businessman surnamed Zhou from Macao", "all admitted to setting up gambling platforms and related criminal activities" but refused to cooperate in the investigation of other cases.
On December 1, 2021, Suncity Group, a company listed in Hong Kong, issued an announcement announcing the resignation of Zhou Zhuohua as chairman of the board of directors of the group.
On September 2, 2022, the Primary Court of the Macao SAR heard a "criminal case involving the crime of the Suncity Group", involving a total of 21 defendants, including Zhou Zhuohua and Zhang Ningning.
As the "first suspect," Zhou Zhuohua faced 289 charges, including the crime of "illegally operating gambling," "money laundering," "aggravated money laundering," "criminal syndicate," "illegally operating gambling in a permitted place," and "considerable fraud."
The court issued a press release detailing the charges, which was described by the Macau media as a rare move. At the same time, on behalf of the SAR government and four gaming companies – Wynn Resort, Macau Entertainment Integrated Resort, MGM Grand Chao Hao and Venetian – the SAR Procuratorate filed a civil claim for "joint and several liability" against Zhou Zhuohua and others.
Sun City operates VIP rooms in the casinos of all four gaming companies. Among them, the Macao SAR government claimed HK$8.26 billion, or separately settled the amount of undercollected gaming taxes; the US-funded Wynn Resort claimed 795 million patacas; Macau Gaming Holdings, which belonged to the late gambling king Stanley Ho, claimed HK$178 million; and Venetian owned by Sands Group claimed HK$300 million. MGM Palace's claim amount is "subject to future clarification and settlement."
The SAR government and the three gaming enterprises combined, with a total claim of 9.797 billion patacas (US$1.218 billion; RMB8.2 billion; HK$9,512 million).
The procuratorate did not further explain the rationale for the civil claim, but according to Macao media reports, in the closing arguments in November 2022, in addition to the four gaming enterprises that were claimed by the procuratorate, Hong Kong businessman Lui Che and Galaxy Entertainment, a subsidiary of Hong Kong businessman, also appeared in court, and the lawyers representing the five gaming enterprises all agreed with the procuratorate's position on the claim.
While the trial was proceeding in Macao, the Wenzhou Municipal Intermediate Court pronounced a verdict on 30 September on Zhang Ningning and 35 other people for the crime of opening a casino and the crime of illegal operation. Among them, Zhang Ningning was sentenced to seven years' imprisonment and fined 800,000 yuan renminbi for several crimes. The Wenzhou Intermediate People's Court found that Zhang Ningning and others committed the crime at the behest of Zhou Zhuohua.
*'Betting on the bottom' allegation*
Image source, REUTERS, "Betting Bottom" involves placing bets on both the table and the margins.
To a considerable extent, the trial process of the Macao Court of First Instance revolved around whether Suncity Group participated in the so-called "bottom gambling" activity, which basically means that gamblers gamble against others privately by multiplying several times by leverage while placing bets at the table.
The judicial police and the procuratorate indicted Zhou Zhuohua for "illegally operating gambling in a licensed place."
The prosecution charged Zhou with more than 220 betting records, 14 of which were instructed.
The evidence shows that the gambling bottom group was controlled by Zhou Zhuohua, but the lawyer denied that Suncity was involved.
The judicial police said that between 2013 and 2021, the number of transcodes (turnover) of Suncity gambling floor was more than 800 billion patacas, and the illegal income reached more than 21 billion patacas.
In his final statement to the court, Zhou Zhuohua himself "felt helpless and puzzled" about the multiple charges, emphasizing that the more than 4,000 employees of Suncity Group have been operating in Macau for more than ten years, creating hundreds of billions of patacas in gaming revenue for Macao.