GGRAsia – Macau ops share junket deposit liability: Macau top court

Macau ops share junket deposit liability: Macau top court

May 16, 2022 Newsdesk Latest News, Macau, Top of the deck

Macau’s Court of Final Appeal announced on Monday sentences in relation to a total of nine cases concerning debt claims involving junket operators based at local casinos. In all the cases, the court concluded that casino operators were jointly liable for the refund of deposits of chips lodged with the junket operators.

Eight of the cases involved casino operator Wynn Macau Ltd and Dore Entertainment Co Ltd, a gambling junket that had operations at the Wynn Macau property in the city’s downtown district. The other case involved casino operator MGM China Holdings Ltd and junket brand Suncity Group.

In each case, the plaintiffs had respectively claimed the junkets – known in Macau as gaming promoters – failed to honour the withdrawal of deposits of chips previously lodged with them. The cases involved amounts ranging from HKD1 million (US$127,000) to HKD6 million, the court said in a press release.

The court said the rulings had been delivered in the first two months of 2022. It mentioned article 29 of administrative regulation 6/2002, stating it “imposed joint liability of the concessionaire towards ‘third parties’ for the activity conducted by (its) gaming promoters.”

A November ruling by Macau’s Court of Final Appeal had already held Wynn Macau Ltd to be a party liable to refund a HKD6-million deposit lodged with Dore Entertainment.

In its annual report filed with the Hong Kong Stock Exchange last month, Wynn Macau Ltd confirmed that the group – via the unit that holds its Macau gaming rights – “was required to pay approximately HKD9.3 million, inclusive of accumulated interest” to the plaintiff involved in that lawsuit.

Last week, the chief executive of Wynn Macau Ltd had said the firm had yet to “accrue for” any “material exposure” to debt claims involving junket operators previously based at Wynn Macau Ltd’s two casinos. He added: “We don’t expect material exposure at this time.”

MGM China had said in its latest annual report – published in March – that it could be liable for as much as HKD202.7 million regarding junket-related deposit lawsuits.

The group said at the time it had been named as a defendant in three civil cases relating to cash allegedly placed with an aggregate of two junkets that had been active at its MGM Macau resort. MGM China had already lost one of the cases at Macau’s Court of Final Appeal, with its final submission dismissed “in February” this year, the firm said.

Macau’s VIP gambling trade has seen a decline in business in recent years, coupled with tightened supervision from authorities in Macau and mainland China. The trend accelerated with the November detention of Alvin Chau Cheok Wa, on suspicion of promoting cross-border gambling overseas to mainland China customers, and the cessation of business at his junket brand Suncity Group.

In January this year, the VIP trade saw the arrest of Levo Chan Weng Lin, boss of junket brand Tak Chun, on suspicion of being a triad leader.

A recent note from Credit Suisse (Hong Kong) Ltd suggested that Macau casino operators could collectively be responsible for as much as HKD50 billion of an estimated HKD100-billion of “unfulfilled liability” and “uncollected debt” left behind after the Suncity Group and Tak Chun junket brands were “abruptly shut down”.