The alleged money-launching and criminal misdeeds conducted by Australia’s Crown Resorts Ltd, which was said to be associated with one of Macau’s biggest junkets, Suncity Group, may mar the reputation of Macau’s casino industry, according to a report published by Steve Vickers & Associates Ltd (SVA), a specialist political and corporate risk consultancy.
Earlier, a report into Crown Resorts, chaired by former New South Wales (NSW) Supreme Court judge Patricia Bergin SC, under the authority of the state’s Independent Liquor and Gaming Authority, was published and tabled in NSW parliament on February 9.
The damning statement listed the evidence of the group’s alleged money laundering and criminal activities, with most of them linked to one of the group’s properties, Crown Melbourne. The evidence prompted Bergin to officially condemn the casino operator “unsuitable” to hold a gaming license at Barangaroo, Sydney.
According to a report by the Guardian, there was a video showing large amounts of cash unloaded from bags in the group’s high-roller room at Crown Melbourne, which Bergin suspected was hosting money laundering activities.
Bergin’s report also stated that Crown Resort allowed Suncity Group, a Macau junket that Bergin stressed was linked to organized crime, to operate its high-roller room at Crown Melbourne. It was the same room shown in the aforementioned footage of money being unpacked from bags and exchanged for chips.
Crown Resorts Ltd is the operator of Crown Melbourne, Crown Perth and Crown Sydney. Bergin has called for a sweeping cultural change in the firm, should it seek to prove its suitability for a gaming license.
“The [Bergin’s] report offers lessons not only to Crown Resort, but also to any businesses involved in the gaming sector, in Macau, or further afield,” Steve Vickers, founder and chief executive officer of SVA stated in the report.
“The real impact is more reputational than actual. Some junket operators have been the source of public adverse comment – especially relating to associations with triad societies and alleged money laundering. This will attract attention from various quarters and regulators,” Vickers told the Times when asked about the impact of the group’s saga on Macau’s gaming industry.
Vickers also stressed the overreliance of many gaming operators on Macau’s junkets to source VIP bettors “downplayed the risk of indirectly dealing with triad societies when doing so,” in some cases.
Vickers’ report also indicated that Australia’s operator seriously misread the determination of the Chinese government to act against gaming promotion, until the arrest of 19 of its staff charged by China for gambling promotion offenses, which prompted a revelation for the group.
Any roadblocks undermining Macau’s casino industry, which has served as a backbone of the city’s financial ecosystem, can have a knock-on effect on local businesses, ranging from hotel, financial and trading, to real estates and leisure businesses, he stressed.
Last year, the Standing Committee of the National People’s Congress (NPC), China’s top legislature, has approved an amendment to the national criminal law criminalizing anyone who “organizes citizens of mainland China to participate in gambling outside the country (or border), which involves a hefty sum or cases with serious consequences.” It will come into force on March 1, 2021.
The tightened law is expected to deal a blow to the city’s VIP sector and junket businesses.
“The PRC government is very keen to prevent capital outflows from the mainland via unlawful methods so the junkets are currently under heavy government pressure,” Vickers told the Times.
“The junket sector is certainly down but is not completely out,” he stated, adding the future is “unclear.” However, “junkets seem to be amending their methodology – some bigger ones are opening operations in South East Asia and are heavily involved in online gaming.”
He suggests that the city stay vigilant and ensure that its banking system is not “inadvertently compromised by those apparently offshore junkets who are actually active locally and using Macau.”