Lifestyle & Entertainment

It’s as if the entire world is attacking the casino industry

casino crack down russia

Reuters

Two men are seen on the floor after being detained at an illegal gaming saloon during a police raid in Russia’s Siberian city of Krasnoyarsk October 28, 2011.

Suddenly, it’s as if the casino industry is under attack all over the world.

In China there are reports that officials have raided a travel agency that works with Korean casinos, arresting their direct marketers, and perhaps some gamblers. This is according to a JP Morgan research report. The extent of the damage is, as yet, unclear but Korean casino stocks fell 10% on the news.

Of course, the Chinese government has been cracking down on Macau, the world’s largest gambling center, for about a year.

Month after month gambling revenue has fallen between 30% and 50%. Foot traffic to the island from the mainland has been capped, the high-rollers are fleeing, and new casinos won’t be getting as many tables as expected. Last year a Macau casino scion’s nephew was arrested with 99 prostitutes at one of his family’s casinos.

The idea here is clear — to clean up the crime and corruption within the industry. And it’s an idea that’s catching, especially in the United States where a recent Treasury Department study estimates that Nevada casinos confiscate $40,000 in fake cash every week.

What authorities fear is that casinos are a becoming quasi-financial institutions — great places to launder money (that’s not new).

What is new, and the reason why it seems the world is working in concert against the industry, is the international reach of casino firms. Globe trotting high-rollers can hop onto their jets and fly across borders to their money at one casino affiliate and then another.

“The most significant money laundering vulnerability at U.S. casinos is the potential for individuals to access foreign funds of questionable origin through U.S. casinos, and to use the money for gambling and other personal or entertainment expenses, and then withdraw or transfer the remaining funds either in the United States or elsewhere,” said the report.

So who are these globe trotters? 

It could’ve been one of the Vegas trials of the century, one with the potential to expose the opaque world of illegal international gambling and its relationship with China’s fearsome mafia, The Triad.

Last year, Paul Phua, a Malaysian businessman with alleged ties to the 14kTriad crime syndicate, was put on trial for running a World Cup gambling ring out of Caesar’s in Las Vegas.

He was released on a technicality earlier this month, when a judge ruled that the FBI’s July raid on his Caesar’s villa was illegal, and his trial was thrown out.

Phua got into his $48 million jet, which had been sitting at McCarren Airport for almost a year, and flew home.

But don’t worry. There is another ongoing Las Vegas trial that also has the potential to out dark industry secrets.

Sheldon Adelson, the billionaire founder of Las Vegas Sands, was forced to take the stand in May. What started as a wrongful dismissal trial brought by, Steven Jacobs, the former CEO of Adelson’s Macau casinos, has turned into something bigger. It’s turned into a display of the corruption, crime and influence pedaling that allegedly characterized the Wild West business culture of Macau’s hey-day.

“There was no bribery. It never happened. Companies like ours are getting offers from people every day. From India. From Russia. Yesterday from Kazakhstan,” said Adelson when he took the stand according to The Guardian. 

Jacobs alleges that he was terminated because he refused to make payments to corrupt contacts in Beijing. On the stand, Adelson was combative. He accused Jacobs’ lawyers of trying to smear his associates.

“You could bring in Mao Zedong, you could bring in Mussolini, you could bring in Stalin, you could bring in Hitler. You could bring in all the bad guys in the world,” he said.

But how would that help?

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  • Lucy Madsen

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