Macau casino junket operator vanishes, leaving massive debts
Macau's casino junket operators - who bring in the city's high-rolling gamblers - have come under renewed scrutiny after one of their number disappeared owing US$1.3 billion.
Security sources say Huang Shan, who has operated junkets in Macau for several years, vanished a week to 10 days ago, leaving the massive debts. His disappearance has fuelled concerns over illegal "side betting'' in the city's lucrative VIP rooms.
Huang is understood to owe huge sums to at least four Macau casinos.
His disappearance comes a month after Las Vegas Sands increased its scrutiny of junket operators in a move that could see a shake-out among the middlemen who account for two-thirds of the betting in the world's largest gambling market.
Junket operators, who bring wealthy gamblers from the mainland, are being asked to provide more information about their businesses to Sands as the company seeks to bolster its safeguards against money laundering and other illegal activities.
The changes are likely to reduce the number of junket operators working with Sands, according to sources.
A law enforcement insider confirmed that Huang did not do business with Sands.
Macau police and the city's gaming inspection bureau have so far refused to comment on the Huang mystery, prompting criticism from gaming consultants.
"What this really shows is how oblivious the casinos and the government are to what is going on in the VIP rooms," said a Macau gaming consultant who monitors the junket industry for institutional investors.
"These side-betting pools are like the 'dark pools' on Wall Street, completely unregulated and opaque, where no one knows whose investments are being paired with whose bets except a few middlemen."
The consultant said he had heard of some games taking place in VIP rooms over Lunar New Year where players were betting 40 times the maximum differential on a baccarat table - or HK$40 million per hand. "Of course, sometimes these bets are spread out across a large group of investors," the consultant added.
"But put yourself in the middleman's shoes: he is the only one with direct access to the player, and the one who has to collect from the player if he loses.
"Wouldn't you be tempted to make off with such huge amounts of money rather than pay back a large group of investors, many of whom you might not have more than a handshake agreement with, especially if you know they have no recourse to the judicial system because the activity was illegal in the first place?"