Las Vegas Sands terminated agreements with three primary junket promoters in Dec, 2021
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Las Vegas Sands, the parent group of local gaming concessionaire Sands China, has indicated in an annual report to have terminated agreements with its ‘three primary gaming promoters’ in December 2021.
The indication – included in the group’s annual report for 2021 – comes at a time of increased regulatory oversight by authorities towards VIP gaming junket promoters and the arrest of Alvin Chau and Levo Chan, the heads of the city’s two largest junket groups, Suncity and Tak Chun.
‘There can be no assurance we will be able to maintain, or grow, our relationships with gaming promoters or that gaming promoters will continue to be licensed by the gaming regulator to operate in Macau, which could impact our business, financial condition, results of operations and cash flows,’ the group indicated.
‘For example, consistent with the overall market in Macau, we terminated our agreements with our three primary gaming promoters in December 2021’.
Las Vegas Sands added that the quality of gaming promoters with whom it establishes relationships is important to its reputation and ability to operate in
compliance with its gaming license.
As with the remaining six concessionaires and sub-concessionaires in Macau, Sands China is preparing for the city’s new gaming license public tender, set to take place before the current licenses are set to expire in June of this year.
Following the arrest of Alvin Chau at the end of November, 2021 some local gaming operators were reported to have terminated their relationship with some junket promoters by the end of December, including Sands, Wynn Macau and Melco.
The Suncity Group boss had been detained at the time together with 10 other people for allegedly operating illegal gaming activities, criminal association and money laundering, charges that were also linked to the boss of Tak Chun last month upon his arrest.
While Suncity – once the city’s largest VIP gaming promoter – later filed for dissolution Tak Chun was still recently included in the annual list of licensed VIP gaming promoters published by the Gaming Inspection and Co-ordination Bureau (DICJ).
Sands China indicated in the report that it could not assure investors that the gaming promoters with whom it is associated will meet the ‘high standards’ it requires something that could end up impacting the group’s reputation.
‘If a gaming promoter falls below our standards, we may suffer reputational harm, as well as worsening relationships with, and possible sanctions from, gaming regulators with authority over our operations. In the event a gaming promoter does not meet its
financial obligations, there can be no assurance we may not incur financial exposure,’ the report notes.
Sands also warned that as spelt out by a Macau Court of Final Appeal (TUI) ruling in November, 2021 it could be held jointly liable with gaming promoters for activities that occur in our casinos.
On November 19, 2021 the TUI found Wynn Resorts (Macau) S.A. (WRM) – an indirectly subsidiary of Wynn Macau and the direct gaming concessionaire holder in the SAR – jointly liable alongside junket operator Dore Entertainment Co. Ltd for the repayment of a HK$6 million (US$747,482) debt to several plaintiffs.
The ruling essentially underlined that gaming concessionaires are jointly liable with gaming promoters, including their managers and employees, for activities carried out by gaming promoters in gaming concessionaires’ casinos where those activities relate to the typical activity of the gaming promoters and are carried out for the benefit of gaming concessionaires.
‘While we strive for excellence in systems and practices for monitoring the activities of gaming promoters operating in our casinos, we cannot assure you that we will be able to monitor all activities carried out by them. Furthermore, we cannot assure you to what extent the Macau courts will in the future find us liable for the activities carried out by gaming promoters in our casinos, nor are we able to determine what Macau courts would deem typical activities of gaming promoters to be,’ Sands added.
Secretary for Economy and Finance Lei Wai Nong stated last year that agreements between junket operators and gaming concessionaires concerning VIP rooms activities will still be allowed in the future if they “fulfil all legal requirements”.
Under a proposed new gaming law bill, gaming promoters will only be allowed to operate with one gaming concessionaire.
The draft bill also bans junkets from resorting to third parties to carry out business with the exception of “situations deemed necessary by their partners, members of the management body or employees.”
Another measure to be implemented concerning junket operations stipulates that until the 10th of each month, gaming concessionaires will need to submit details regarding the commissions paid to junkets in the previous month.
The draft bill was approved by the Legislative Assembly and is currently under committee level evaluation before a final bill will be put to the floor for voting.
