China Tightens Reins on Macau

Discussion in 'China' started by Ray, Dec 12, 2012.

  1. Ray

    Ray The Chairman Defence Professionals Moderator

    Apr 17, 2009
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    China Tightens Reins on Macau

    Police in Gambling Enclave, Mainland Detain Junket Operators; First Sign of a Corruption Crackdown

    The Chinese government is increasing its scrutiny of Macau's booming casino industry and the junket operators that bankroll its high-rolling gamblers, the first sign of a crackdown on corruption following stepped-up rhetoric by China's new leadership.

    In recent weeks, police in mainland China and Macau have detained people from at least three of Macau's biggest junket operators, the middlemen who extend credit to high-roller players and collect the debts in China, according to people familiar with the situation. Some of the detentions have occurred in China and in other cases, the detainees have been moved there, these people say.

    Casino operators in Macau have also noticed more restrictions on cross-border financial transactions involving Chinese funds and recently received requests for information from Macau police about the people staying at their hotels, casino executives and others said. Such requests aren't unheard of but have raised concerns in light of the other events, these people say........................

    Details about why the people were detained or their current status weren't available because Chinese police don't routinely make such matters public. There have been no official allegations of wrongdoing by junket operators, individuals or casinos.

    The recent detentions "are an attempt by the Chinese government to tell people in the market that they need to behave, especially regarding underground money transfers," said Hoffman Ma, deputy chief executive of Ponte 16, a Macau casino...........................

    Chinese individuals aren't allowed to move more than $50,000 a year out of the country, including to Macau, which, like Hong Kong, is part of China but has its own financial system and its own set of laws. That restriction has prompted some high-roller gamblers to rely on junket operators to get around Chinese laws and provide access to greater sums.

    According to a Wall Street Journal analysis of Chinese economic data, about $225 billion flowed out of China in the 12 months through September, a number that captures both legal capital outflow and some of the illicit flow.

    Displays of wealth, such as the increasing numbers of wealthy Chinese coming to gamble in Macau's casinos, are of concern to the Chinese government amid heightened outrage at official corruption after the fall of former party high-flier ...................

    U.S. law-enforcement officials and diplomats have long suspected that junket operators carried out money laundering and had ties to organized-crime gangs known as triads. A reminder of the grip the triads have traditionally held on Macau came over the weekend, when a former leader of a triad operating in Macau, "Broken Tooth" Wan Kuok-koi, was released from maximum-security prison after serving 14 years for triad membership and money laundering among other crimes. Since Macau returned to Chinese control in 1999, triad violence has declined.

    Last month at Wynn Macau police detained a partner of one of Macau's major junket operators who has ties to Mr. Bo, the disgraced Chinese politician, said people familiar with the situation. The partner, Pang Yufeng, and his associates, including his driver, were taken to China at the request of Chinese authorities, the people said.

    Mr. Pang is one of four partners at junket operator David Star, which has a presence at all six of Macau's casino operators, including properties owned by U.S. operators Wynn Resorts......

    Chinese police have also detained people on the mainland from at least four junket groups that operate in Macau in conjunction with their alleged illegal underground banking activities, said people familiar with the matter.

    Qin Si Xin, another partner of David Star, is among those who have been detained in China, these people say. Mr. Qin, a mainlander, is listed on a Las Vegas Sands ledger viewed by the Journal that shows intracompany transactions between Macau and Las Vegas. In September 2009, he received $1.65 million at the Venetian in Las Vegas from a junket operator in Macau, according to the ledger. It is unclear what the payment was for, but there is no evidence that Mr. Qin's transaction violated any laws. He couldn't be reached to comment.

    Transfers where money flows across borders via casino accounts have raised concerns among casino executives and U.S. authorities that customers could exploit the intracompany accounts to launder money.......

    Mr. Ma, the Macau casino official, said the Chinese government flexed its muscle over Macau in 2008 when it tightened visa restrictions for its citizens coming to Macau, hurting the casinos' business. "Visa restrictions years ago showed the power of the Chinese government to control Macau's gambling revenue if they want to," he said.

    China Tightens Reins on Macau -


    End of the City of Good Times?

    The Macau Mafia is quite strong. It is because the new administration has taken over China, a wee bit of 'show' is required to show that the new chaps mean business.

    One will just have to wait for sometime when it will be business as usual.

    Money is the lifeblood of China and more so the Chinese.

    Without having avenues to generate it both will wilt and fade.

    And that is the last thing that China or Chinese desire.

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