Macau casinos take out insurance policies after rise in hostage-taking over gambling debts
Rise in hostage taking over gambling debts leads to development of specialist policies
Major hotels, resorts and casinos in Macau are banking on lucrative insurance policies to guard against the abduction of wealthy or celebrity guests amid a rise in the number of kidnappings over unpaid gambling debts.
A top Hong Kong insurance broker said all major hotels and casino groups in Macau had expressed interest in specialist risk insurance to mitigate the fallout from any high-profile incident.
Ashley Coles, an assistant director of credit, political and security risks at Jardine Lloyd Thompson, said: "Word of mouth can lead to a trend of an interest in the policy, security and the protection … all the major casino and hotel chains will have looked into this."
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He said the many high-net-worth people on casino and hotel floors in Macau and around Asia meant an increase in exposure to kidnapping risks. At the same time, the slowing economy on the mainland and falling casino revenues in Macau were leading to an increase in bad debts which often ended in disputes. "Certainly there is a correlation between mainland China, Macau and the interest and purchase of this type of policy," Coles said.
The policies often allow for the deployment of crisis responders to diffuse the dispute in kidnappings, and protect casinos and hotels from legal liability which could lead to lawsuits by the victim or family members.
Most perpetrators of illegal detentions on casino or hotel premises are seeking only payment of the unresolved debts rather than huge ransom demands and typically hold victims inside hotel rooms, Coles said.
He said hotels had a duty of care to clients and must walk a thin line between providing comfort and ensuring security.
Customers in hotels and casinos would usually be unaware of whether insurance cover was in place, but Coles said the large chains often discussed the issue, and some acquired insurance after liaising with each other.
The high-profile nature of many kidnappings in Hong Kong and the huge ransom demanded have placed the city on a risk rating for these insurance policies on par with Venezuela.
Earlier this year, a ransom of HK$28 million was demanded for Queenie Rosita Law, the heiress to the Bossini clothing chain.
But Coles said Venezuela had an "underlying threat" that made it one of the most dangerous places in the world for kidnappings, unlike Hong Kong, which was significantly safer.