Macau: What’s behind the casino crime figures?

Samuel Lung, crime,Macau, Compliance, Ernst & Young
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Samuel Lung, director of fraud investigation and dispute services for Ernst & Young and a member of the Asia-Pacific Advisory Committee for the International Association of Gaming Advisors (IAGA), provides a guided tour to Macau’s junket operations and how these crime figures can connect with the territories ‘dark side’.


“In my last column published in the March 2016 issue of International Casino Review, I quoted the casino crime figures announced by the Secretary for Security of Macau, illustrating that unlawful detention cases seemed to be proliferating in 2015. You may ask: why is it the case and what is the nexus between unlawful detention and the casinos?

VIP room operations depend on junkets, who, legally speaking, act as intermediaries or middle men by bringing high net worth customers to the casinos for gaming and entertainment. These high net worth VIPs are prominent businessmen, entrepreneurs, or influential elites in China or elsewhere in Asia. Junkets often bring these customers to the VIP rooms to gamble and enjoy a more privileged and private gaming experience. These VIPs do not buy chips from the cage, instead they buy junket chips (or ‘clay chips’ in Chinese) through junkets. These junket chips are not cash convertible at the cage but it can only be exchanged for money through junkets.

In reality, a junket usually does not require a VIP to pay anything when entering into a casino but a prudent junket usually has a book to record the amount of junkets chips purchased by a particular VIP as if there is a credit line being provided to that VIP. If a VIP wins and settles the junket chips at the spot, the junket can redeem the junket chips at an agreeable commission with the casino. The junket pockets the commission and the VIP gets the money. Both are of course happy.

However, if a VIP loses in an unfortunate evening and does not settle the ‘bill’ when leaving the casino, then the junket will base on his record and collect the loan amount from the VIP. Due to the economic downturn coupled with the anti-corruption campaign in China, for instance, the VIP may not be able to repay the amount of money he lost in the VIP room. Some VIPs even flee away from their hometowns and become unreachable to their junkets. In some cases, a VIP may obtain a loan from a rogue junket who may have ties with loan sharks and criminals and therefore the VIP may be unlawfully detained until the loan is repaid.

While another possibility is that the junket may be unlawfully detained by the loan shark syndicates if he acts as a guarantor of his VIPs and unwisely takes up the liabilities from his VIPs.

This explains the reason of the some of the unlawful detained cases in 2015 that had direct or indirect linkage with casinos.”

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