With regard to the arrest of Zhou Chouhua, chairman of the Sun City Group, who was approved by the Wenzhou people's Procuratorate on suspicion of operating cross-border gambling activities, JPMorgan Chase & Co published a research report, pointing out that the market may not be surprised by the above news, but the relevant documents mention Sun City's activities in Macao, which means that the scope of the "cross-border gambling publicity ban" includes Macao, beyond market expectations, and for the first time to crack down on senior intermediaries in a high profile. In addition, the timing of issuing arrest warrants is also worrying as the renewal of gambling licences in Macau may affect views on the intermediary system.

The bank believes that the above events have had a negative impact on the gaming intermediary business or the VIP lounge (VIP) business, as Chow Cheuk-wah is a well-known intermediary, while Sun City has a market share of about 40-45 per cent of the Macau intermediary market and accounts for about 15 per cent of Macau's total gambling revenue. The bank expects revenues from VIP intermediaries in Macau's gambling industry to be 30 to 50 per cent lower in the coming weeks than they are now. Although Macau's gambling revenue and EBITDA accounted for less than 40 per cent and 15 per cent of VIP revenue in 2019, the news may dampen market sentiment and some investors are worried that the authorities will crack down on the gambling industry more widely, a view that Morgan disagrees with, but cannot refute.