In a story that was just revealed yesterday out of Hong Kong, it looks as if the thriving gambling region of Macau has fallen victim to widespread casino “skimming.†For those not familiar with skimming, it primarily involves high-limit players and a junket agent. Junket agents are responsible for bringing in high-rollers to the casinos and ensuring they play a significant amount during their stay. When a skim goes down, both the agent and the player form an off-the-table deal where each bet that is put in is matched or multiplied by a separate off-table wager. This is all done without the casino’s knowledge, and the full amount of the bet would avoid the wrath of [in this case] Macau’s 40% tax on gross revenues, which in turn allow the junket agent to offer a better return to their high-roller.
It’s almost ironic that the practice would hit such a young and popular gaming destination as Macau. In fact, the original gambling Mecca of Las Vegas was plagued for nearly three decades by the same scam. “Sin City†was still a growing town back then, but the mafia made sure it was getting its piece of the pie as well. As prime developers of the original casinos on the now infamous Las Vegas Strip, mob bosses and gangsters played a key role in helping speed up the city’s growth – but not before they skimmed millions of untaxed dollars out of the establishment from the 1950’s to the 1980’s.
Although the scam has only been seriously documented over the past 5 years, there is plenty of concern for the Chinese government who oversee the operations. If the numbers are accurate, taxpayers will have shelled out nearly $40 billion because of these illegal casino skimming operations. Also, in the last 5 years, Macau’s biggest casinos have lost an estimated $100 billion thanks to this illegal activity – the equivalent of $13 billion in U.S. dollars! It should be noted that most of Las Vegas’ biggest casino operators have moved their own chains into Macau, hoping to be cash in on the fastest-rising gaming market in the world.
Regardless of how successful Macau has proven to be in the past few years, it still has a very real problem on their hands. Regional operators continue to say the issue is being investigated thoroughly and being worked on as much as possible, but they have not guaranteed a solution is on the horizon any time soon. Like Las Vegas before them, it’s unknown at this time if organized crime is behind such an operation, or if it’s just an isolated situation that is just being taken advantage of by VIP gamblers and their “handlers.†In either case, the problem may become more widespread if government authorities don’t do more to stop it.
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