GGRAsia – Wynn expects US$8mln litigation cost in Dore cases

Wynn expects US$8mln litigation cost in Dore cases

Apr 25, 2022 Newsdesk Latest News, Macau, Top of the deck

Macau casino operator Wynn Macau Ltd has recorded HKD62.0 million (US$7.9 million) as provision for litigation costs regarding cash deposits individuals claim were placed with Dore Entertainment Co Ltd, a gambling junket that had been working with the casino company. The information was included in the Wynn Macau Ltd’s annual report filed with the Hong Kong Stock Exchange on Friday.

A November ruling by Macau’s Court of Final Appeal held Wynn Macau Ltd to be a party liable to refund a HKD6-million deposit lodged with Dore Entertainment, which had operations at the Wynn Macau property in the city’s downtown district.

In a decision dated November 19, seen by GGRAsia, the city’s highest court said the “best interpretation” of existing legislation implied that article 29 of administrative regulation 6/2002 “imposed joint liability of the concessionaire towards ‘third parties’ for the activity conducted by (its) gaming promoters.”

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

The company added: “We believe most remaining cases are without merit and unfounded and intend to vigorously defend against the remaining claims pleaded against us in these lawsuits.”

Nonetheless, the casino firm said it has “made estimates for potential litigation costs based upon its assessment of the likely outcome” of these lawsuits. It said it has recorded provisions of HKD62.0 million for such amounts in its financial statements for the year to December 31,2021.

“No assurances can be provided as to the outcome of the pending Dore cases and actual results may differ from these estimates,” stated Wynn Macau Ltd.

A gaming law amendment bill – currently being scrutinised in the city’s Legislative Assembly – states the joint liability that gaming concessionaires and gaming promoters must bear, regarding junket-generated VIP business. The city’s legislators also gave a first-reading nod last week to a consolidating bill that covers licensing and regulatory matters for the city’s junket operators and for so-called satellite casinos.

Another Macau casino operator, MGM China Holdings Ltd, said in its latest annual report that it might be liable for as much as HKD202.7 million regarding junket-related deposit lawsuits.

The group said 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 has already lost one of the cases at Macau’s Court of Final Appeal, with its final submission dismissed “in February” this year.

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”.