Tuesday, March 30, 2010

What Singapore doesn't want to happen in its casinos

Late last autumn, a Hong Kong jury convicted four men of a conspiracy to commit bodily harm and a fifth of soliciting a murder.

At first, the men had been ordered to break the arms and legs of a dealer at Sands Macau suspected of helping a patron cheat millions of dollars from the business. Later, a call went out to murder the dealer, court records show. But then one of the gangsters balked and reported the plans to authorities.

So begins a fascinating investigation into the links between organized crime and Macau's casinos by Reuters and the Investigative Reporting Program at University of California, Berkeley.

As the authors note, the link between Macau's gambling industry and triads is something of an open secret - I've heard many tales of VIP gamblers chased down and beaten almost to death or shot and killed after failing to repay debts to junkets, the middlemen who extend crucial lines of credit to mainland Chinese gamers and get commission from the casinos for bringing in these high rollers.

The Reuters piece lays out the connections between the VIPs, the junkets and casinos such as the Sands Macau, owned by America's Las Vegas Sands group. It goes some way to explaining why the Singapore government has decided not to allow Macau-style junkets to operate in the Lion City, as I wrote in a recent piece for Asia Sentinel.

The Reuters story notes that when Macau first opened up to international casino operators, the big US players, such as LVS and Wynn Resorts, were reluctant to allow junkets to control their VIP rooms because of fears that they would be taken over by triads.

But, it notes, "the US companies realized soon enough that they could not compete with local casinos without junkets".

It will be interesting to see how Singapore does without junkets and whether the city-state's organised crime syndicates, which do exist contrary to popular external perception (just read details of this near-riot that occurred after a police raid on a gambling den in the red light district of Geylang), manage to muscle in on the casino business successfully.

Hat-tip to The Economist's online Asia editor.


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