Sands lawsuits shine harsh light on Macau's casino paradise

Sun Apr 14, 2013 3:56am EDT
 
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By Farah Master

MACAU (Reuters) - Casino magnate Sheldon Adelson's reference to triad organized crime gangs in testimony in a lawsuit has hit a raw nerve in Macau, the Chinese boomtown that his Las Vegas Sands Corp helped transform from a gangland haven into a $38 billion gambling capital.

The lawsuit against Sands was brought by Hong Kong businessman Richard Suen, who is seeking $328 million he says he is owed for helping the U.S. firm obtain one of three coveted casino licenses in Macau, now the world's biggest gambling market with annual revenues more than six times Las Vegas's.

Adelson's comments about triads reverberated across Macau this week and prompted a former Sands partner, casino operator Galaxy Entertainment Group Ltd, to post a regulatory filing with the Hong Kong stock exchange objecting to "certain inaccurate statements".

Sands and Galaxy jointly won a Macau casino license in 2002, but they failed to reach an operational agreement and split up. Adelson, 79, when asked in a Las Vegas court why the two firms could not work together, responded that Galaxy "had expressed their judgment they were going to do business with either reputed or triad people and we couldn't do that."

That comment, which drew little attention in Las Vegas, was front-page news in Macau because it suggested China had failed to clean up the violent gangs that dominated the gambling scene a decade ago. Triads involved in Macau's VIP gaming rooms were notorious for their heavy-handed methods of collecting on gambling debt. Macau's VIP segment, where wealthy Chinese wager millions, accounts for around 70 percent of total revenues.

A Galaxy spokesman said the company was seeking legal advice and could not comment further.

Interviews with seven Macau gaming executives, including four former Sands employees, revealed a sense of dismay that the trial, watched locally online and tracked closely in the daily papers, was drawing attention to a seedier side of Macau that China has sought to scrub. The city wants to position itself as a transparent and reputable tourist destination.

China cracked down on triads after it took formal control of the former Portuguese colony in 1999. Back then, mobsters like the infamous Wan "Broken Tooth" Kuok-koi gave Macau a name for violence as much as gambling.   Continued...

 
Las Vegas Sands Chairman and CEO Sheldon Adelson and his wife Miriam Ochsorn (R) pose for a photo during the opening ceremony of Sheraton Macao hotel at Sands Cotai Central in Macau September 20, 2012. REUTERS/Tyrone Siu