cheka.
2nd October 2015, 08:56 AM
http://www.wsj.com/articles/macaus-latest-woe-embezzlement-allegations-1443529278
MACAU—An alleged embezzlement scandal at a junket business that lends money to high-rollers inside the VIP rooms of Wynn Resorts Ltd. ’s Macau casino is adding to the woes of the world’s biggest gambling center.
Investors in the junket rushed to pull out money after speculation about the alleged incident spread within casino circles, according to Macau gambling executives. An analyst’s report also noted allegations that an employee had absconded with as much as 2 billion Hong Kong dollars (US$258 million).
Dozens of investors took to the streets in groups to protest, saying their requests to withdraw money had been refused—deepening a crisis of confidence in the lending system that powers the Chinese gambling hub.
Macau casinos rely on junkets to bring in high-stakes gamblers because they have underground banking networks that enable punters to circumvent China’s controls on capital leaving the country. Junkets, whose major financial backers are often undisclosed, also attract investors who range from working-class locals to wealthy mainland Chinese by offering them fixed monthly returns of 1% to 2%.
Junkets drove Macau’s explosive growth—gambling revenue totaled $44 billion last year, or seven times that of the Las Vegas Strip—but the system has been shriveling under the weight of Beijing’s crackdown on corruption, money laundering and capital flight.
Macau’s gambling revenue is on a 15-month losing streak, tanking 37% so far this year compared with a year ago. Shares of Macau’s six casino operators—including units of Wynn, Las Vegas Sands Corp. and MGM Resorts International —have fallen an average of 56% in the past 12 months.
Neptune Group Ltd. , the Hong Kong-listed arm of one of Macau’s biggest junkets, Friday said it had swung to a net loss for the year ended June 30 and that management is facing “pressing concerns” amid a “vicious circle which has devastated Macau VIP gaming business.”
MACAU—An alleged embezzlement scandal at a junket business that lends money to high-rollers inside the VIP rooms of Wynn Resorts Ltd. ’s Macau casino is adding to the woes of the world’s biggest gambling center.
Investors in the junket rushed to pull out money after speculation about the alleged incident spread within casino circles, according to Macau gambling executives. An analyst’s report also noted allegations that an employee had absconded with as much as 2 billion Hong Kong dollars (US$258 million).
Dozens of investors took to the streets in groups to protest, saying their requests to withdraw money had been refused—deepening a crisis of confidence in the lending system that powers the Chinese gambling hub.
Macau casinos rely on junkets to bring in high-stakes gamblers because they have underground banking networks that enable punters to circumvent China’s controls on capital leaving the country. Junkets, whose major financial backers are often undisclosed, also attract investors who range from working-class locals to wealthy mainland Chinese by offering them fixed monthly returns of 1% to 2%.
Junkets drove Macau’s explosive growth—gambling revenue totaled $44 billion last year, or seven times that of the Las Vegas Strip—but the system has been shriveling under the weight of Beijing’s crackdown on corruption, money laundering and capital flight.
Macau’s gambling revenue is on a 15-month losing streak, tanking 37% so far this year compared with a year ago. Shares of Macau’s six casino operators—including units of Wynn, Las Vegas Sands Corp. and MGM Resorts International —have fallen an average of 56% in the past 12 months.
Neptune Group Ltd. , the Hong Kong-listed arm of one of Macau’s biggest junkets, Friday said it had swung to a net loss for the year ended June 30 and that management is facing “pressing concerns” amid a “vicious circle which has devastated Macau VIP gaming business.”