Macau’s Court of Final Appeal has upheld a ruling from the Court of Second Instance, stating that casino operator Wynn Macau Ltd was jointly liable for the refund of a deposit of chips worth HKD6 million (US$769,912) lodged with Dore Entertainment Co Ltd, an operator of Macau gambling junkets.
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.”
The court ruling also noted that the concession contract between the Macau government and Wynn Macau Ltd included a provision stating that the concessionaire must “answer, under the general relationship of consigner-commissioner, for damages caused by entities it has contracted for the operation of the activities that integrate the concession.”
The court added: “It is clear and evident that ‘gaming promoters’ must be included among the ‘contracted entities’ for the operation of the activities that integrate the concession.”
In a statement filed on Wednesday with the Hong Kong Stock Exchange, Wynn Macau Ltd said: “Based on advice from the Macau counsel of the company, the judgement is final and binding to all parties. The group is currently seeking legal advice from its Macau counsel in relation to the judgement.”
The court decision was first reported by the Portuguese-language radio service of TDM.
The case is related to a high-profile 2015 incident of alleged theft of large amounts of Dore Entertainment money by an ex-cage manager from a VIP room at the Wynn Macau casino hotel (pictured). At the time, a number of people came forward claiming they had invested with Dore Entertainment on the promise of higher returns than those offered by regulated banks but had lost their money because of the alleged incident.
In April 2018, the Court of First Instance ruled that Dore Entertainment had to repay the HKD6-million chip deposit to a client, but it held that Wynn Macau Ltd bore no responsibility in that particular case.
In a decision in October 2018, the Court of Second Instance decided that Wynn Macau Ltd was jointly liable for repaying the deposit plus interest at the legal rate. That was because Wynn Macau Ltd is the gaming concession holder that was overseeing at the time the VIP room where the alleged theft took place. The interest amounts to HKD3.65 million, according to Wednesday’s filing by the casino firm.
The October 2018 ruling of the Court of Second Instance said Wynn Macau Ltd should be jointly liable for the damages caused by the Dore Entertainment’s activities, for neglecting its oversight duty, thus “allowing or even tolerating that a gaming promoter ran such activities in its casino”.
António Lobo Vilela, a former senior advisor to Macau’s Secretary for Economy and Finance, had suggested in March that the court case – at the time still pending – could have “crucial” implications for the industry and for the junket sector. In an article published in Gaming Law Review, Mr Vilela said the Court of Final Appeal ruling could “reshape forever the relationship between casino operators and gaming promoters, finally understanding that the latent financial risks could eventually outweigh the perceived profitability of the VIP gaming.”
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Amount that each Macau casino operator paid for the circa six-month extension of their respective contract