Pacific island casino operator Imperial Pacific International Holdings Ltd says it has not received any notification suggesting it is being investigated by U.S. federal authorities regarding the volume of cash flowing through its casino.
“The group has never received any investigation notice from the U.S. Treasury’s Financial Crimes Enforcement Network,” the firm said in a filing on Tuesday.
Hong Kong-listed Imperial Pacific has the right to an exclusive casino licence on Saipan, the main island of the Commonwealth of the Northern Mariana Islands, a U.S. jurisdiction. The casino licence was granted to Best Sunshine International Ltd, a subsidiary of Imperial Pacific.
Bloomberg News had reported in a Monday story that the volumes of cash wagered at Imperial Pacific’s current temporary Saipan casino (pictured) “are drawing the attention of law-enforcement officials”.
The story also quoted a Saipan legislator saying he feared the island was becoming a “safe haven” for illicit Chinese money.
On Tuesday morning Hong Kong time, Imperial Pacific had announced the suspension of its shares on that city’s bourse prior to that day’s trading. The suspension was lifted on Wednesday morning prior to the market opening.
On November 2, Imperial Pacific had announced that its unaudited VIP table games rolling turnover for October 2016 was US$3.84 billion, with similar strong performance in previous months.
In its 2016 interim report filed on August 22, the group said it was operating 48 gaming tables and 144 slot machines at the temporary casino, which will be superseded by a larger property due to be constructed.
Bloomberg had said in its Monday story: “The U.S. Treasury’s Financial Crimes Enforcement Network, which is responsible for alerting prosecutors and other authorities of suspicious financial flows, has taken notice of the activity at Best Sunshine, according to a person with knowledge of the matter.”
Capital flight claim
The news outlet said the daily reported revenue for each of Best Sunshine’s VIP tables in the first half of the year – about US$170,000 – was “almost eight times the average of Macau’s largest casinos”.
Bloomberg added: “Large-scale capital flight may be what accounts for the revenues at Best Sunshine, according to executives at three Macau gambling promoters, who spoke on the condition they not be identified bad-mouthing a competitor. The numbers are simply impossible if they are not inflated or facilitating money-laundering, they said.”
Imperial Pacific said in its Tuesday filing: “Having made all reasonable inquiries, the board of directors… hereby clarifies that the allegations are false.”
It added: “The board is seeking legal advice and reserves the right to pursue legal actions against unfounded report.”
Imperial Pacific further stated: “The group has implemented stringent internal control measures and has fully applied an anti-money laundering system to ensure compliance with all applicable U.S. laws and regulations.”
The casino firm added: “According to the group’s internal log data, since 2016, the visitor headcounts at 10pm of Best Sunshine casino have never been below 300. As there are only 38 gaming tables in the casino and each table is able to serve five to six customers at the same time, our service capacity has saturated.”
GGRAsia approached Imperial Pacific for comment on the points raised in the Bloomberg story, but had not received a reply by the time this story went online.
But former Macau gaming executive Mark Brown, Imperial Pacific’s chief executive, was quoted by Bloomberg as ridiculing suggestions of impropriety.
“I’ve heard every question that you have in your mind,” Mr Brown was quoted saying, adding he was not aware of any U.S. Treasury inquiry and had not been contacted by the agency.
“We are very transparent. We don’t want to do anything to break the law,” he was quoted saying.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia