Adelson comments prompt probe into junket violations in Singapore
Singapore’s casino governing body is investigating allegations that unlicensed junket representatives are operating illegally at the two casinos on the island nation, including the Marina Bay Sands, which is owned by Las Vegas Sands Corp.
Comments made last month by Las Vegas Sands Chairman Sheldon Adelson at an investment forum in Las Vegas apparently triggered the inquiry.
Media outlets have reported the Casino Regulatory Authority in Singapore “has to-date received some information alleging illegal activities in the casinos,” a spokesman for the agency said in a statement.
The Singapore matter is not tied to several current investigations of Las Vegas Sands by the Securities and Exchange Commission, the U.S. Department of Justice, the Nevada Gaming Control Board and the Hong Kong Securities and Futures Commission.
The agencies are looking into possible violations of the U.S. Foreign Corrupt Practices Act that were alleged in a wrongful termination lawsuit filed against the company by the former head of its Macau casino operations. Adelson has called the lawsuit “pure threatening, blackmailing and extortion.”
Singapore authorities said Adelson made “inaccurate comments” about the use of junket representatives during the March 28 J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Forum.
Adelson told the moderator that Singapore law prohibits casino operators from doing business with third parties.
“We are not doing business with third parties (junket operators). (That) doesn’t mean one doesn’t slip though without our knowing about it,” Adelson said.
He said while looking at a list of high-end customers last November, he discovered a $5 million transfer of money between Macau and Singapore.
“Well, that’s obviously a junket rep,” Adelson said at the forum. A replay of the Adelson’s comments was still available Monday on the Las Vegas Sands corporate website.
A Las Vegas Sands spokesman declined comment on the Singapore matter.
The company opened the $5.7 billion Marina Bay Sands a year ago. In the fourth quarter of last year, the 2,560-room Marina Bay Sands was responsible for more than 27 percent of the Las Vegas Sands overall quarterly revenues.
Junket operators issue credit to high-end gamblers and collect debt on behalf of casino operators in exchange for commissions. Junket operators are common in Macau where Las Vegas Sands operates three casinos.
At the investment forum, Adelson suggested Singapore had not decided about allowing junket representatives to operate at the Marina Bay Sands or Resorts World.
A spokeswoman for the Casino Regulatory Authority told Asian media the agency had received junket applications endorsed by Resorts World Sentosa and is currently processing and investigating them. She said the junket operators would be allowed to operate once they are licensed.
Adelson said at the investment forum that Las Vegas Sands had petitioned the Singapore government for clarification on the junket operator rules.
“Look, make up your mind, you either are going to allow junket reps, or you’re not,” Adelson said during the investment forum. “We can’t continue where one of the two duopolies do business with junket reps.”
Macquarie Securities gaming analyst Chad Beynon said the Singapore investigation might clear up any confusion about the casinos using junket representatives.
“One of the views in the market to date has been that the VIP playing field in Singapore has not been level with each of the casinos taking a different interpretation of how to operate with shadow junket,” Beynon told investors in a research note. “We think the difference in interpretation has meant that VIP market shares have been skewed. Once a ruling is made, we think that market shares in the VIP space will become more balanced.”
Singapore legalized gaming in 2005 and allowed just two casinos to be built as part of a plan to double the annual visitor arrivals to 17 million by 2015. Singapore announced in February more than 11.6 million travelers visited the market in 2010, following the openings of both Marina Bay Sands and Resorts World.
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.
