Macau junket operator Dore Entertainment Co Ltd has confirmed allegations it has been a victim of internal fraud by a former employee. The operator however did not confirm the amount of money involved.
On-the-ground checks by several investment analysts covering the gaming sector indicate the amount is likely to range from HKD200 million (US$25.8 million) to as high as HKD2 billion.
“Dore group’s ex-cage manager Mimi Chow allegedly used her power to conduct unauthorised actions without the company’s knowledge, which severely impacts the company’s interest and reputation,” Dore said in an official statement originally in Chinese and translated and quoted in a note from Union Gaming Research LLC.
The Dore statement added: “Due to the seriousness of this event which involved fraud, the group has filed a police report.”
The case was first reported last week. According to several analysts, Dore group’s main VIP rooms are in Wynn Macau casino resort and include two rooms with at least 25 tables. Wynn Macau is operated by Wynn Macau Ltd, a subsidiary of U.S.-based casino operator Wynn Resorts Ltd.
Union Gaming’s note, carrying the date September 11, stated that its team had visited the Dore facilities at Wynn Macau following the fraud reports and “found that business is continuing as usual, with no evidence that HKD2 billion had been stolen.”
Asked about the Dore case, Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac – whose portfolio includes the city’s gaming sector – said he had already ordered the gaming regulator to follow up on the case.
“We have prevention measures in place to address irregularities,” Mr Leong stated, quoted by public broadcaster TDM. “We need to follow this case and, if necessary, introduce changes to the current rules,” he added.
On Saturday a group of people describing themselves as investors in Dore’s cage operations held a protest outside Wynn Macau, according to local media reports. They were demanding the junket firm allow them to withdraw cash deposits placed with the junket operator.
It is common for junket operators in Macau to raise capital for their rolling chip programmes by offering private investors above-market interest rates for their deposits. The capital raised is then used to extend credit to VIP players usually coming from mainland China.
The Macau police have received at least 24 complaints regarding the Dore case, Portuguese-language media outlet Jornal Tribuna de Macau reported on Monday. Most of the complaints are said to be from investors on Dore’s cage operations.
“The reported junket theft and various VIP room closures in late-August/early-September cast additional uncertainty on the already weak [Macau] VIP gaming segment which has already been hit hard by China’s economic slowdown and anti-corruption campaign,” noted a Monday note from Japanese brokerage firm Nomura.
Macau’s VIP segment has been the most hurt by the current slump in the city’s casino industry. Data from the Macau government for the second quarter of 2015 showed VIP baccarat GGR – the game of choice for Chinese high rollers – fell 42.2 percent year-on-year.
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”China has been strengthening the control over capital flow, and the impact of that has already been reflected [on Macau’s gaming revenue trend]. There should not be any bigger impact from the new… legislation [on the mainland] … on the gaming revenue trend here”
Wilfred Wong Ying Wai
President of Macau casino operator Sands China