Macao

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Heracleum Persicum
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Joined: Sat Dec 22, 2012 7:38 pm

Macao

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WSJ : The disappearance of a Macau junket figure believed to owe up to 10 billion Hong Kong dollars ($1.3 billion) is roiling the world's largest casino market and putting a spotlight on the opaque network of middle men who drive nearly two-thirds of the Chinese territory's gambling revenue.

Unlike other gambling hubs like Las Vegas, Macau depends on junkets for many of its customers. These companies bring high-spending gamblers to the casinos from mainland China, issue them credit and collect players' debts in exchange for commissions. The system took root there because the Chinese government imposes restrictions on how much cash its citizens can take out of the mainland and because gambling debts aren't considered valid inside China.

Huang Shan, a junket operator active in Macau's gambling industry for around four years, disappeared sometime last month, according to several senior casino and junket industry executives investigating the matter. Mr. Huang's disappearance leaves investors struggling to recoup up to $1.3 billion, they said.

Mr. Huang had developed a large business by offering investors payouts of 2.5% a month, higher than the industry standard of 1% to 2%, said some of the executives. Junkets operate much like banks, taking cash from investors and lending it out to gamblers. Many investors agree to fund that lending in return for fixed monthly dividends.

Mr. Huang hasn't been accused of any wrongdoing by authorities and couldn't be reached for comment. A representative from Macau's Judiciary Police said the force wouldn't comment. Macau's casino regulator didn't respond to requests for comment.

Investors in the gambling business are scrambling to get their money back and industry executives worry that the incident could squeeze credit in Macau, which generates seven times the gambling revenue of the Las Vegas Strip. Casino executives said their companies shouldn't suffer any direct losses from the incident but that they were concerned about any potential shocks to the system.

People from Macau's junket industry have periodically disappeared with large debts before, and "the market didn't even skip a beat," said a senior casino executive investigating the situation. But the person said that this case could be different because of the enormous amount of money involved. "At least 100 people are looking for this guy," said an investor in one of Macau's largest junkets.

Hoffman Ma, a junket investor and deputy chief executive of Macau's Ponte 16 casino, said that Macau's junket operators rely on tens and even hundreds of investors for their capital. But now that some investors are worried they've lost money, "people might hesitate to invest," he said. That could cause a shortage of capital and limit growth.
Probably having a "Cement Jacket" :lol:
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