Recently, Reuters did an article on how the Las Vegas Sands are related to the Chinese triads. The following article explains the way in which the "VIP" rooms are run in Macau and how the triads are involved.
At the heart of the triad involvement in Macau casino gambling is the “Bate-Ficha” or “dead chip” business model. Under this business model, the casino operator sells a large number of “dead chips” to a third party. In casino parlance, “dead chips” are gambling chips which can only be used to play casino games; they cannot be exchanged for cash. Such “dead chips” are usually sold at heavily discounted rates.
The third party which purchased the “dead chips” are usually given a “VIP” room within the casino. The third party then proceeds to attract gamblers to this “VIP” room where they will re-sell the “dead chip” to gamblers at a profit.
To attract gamblers, the third party normally works with junket operators. The junket operators are crucial for the success of Macau casinos due to the strict currency controls China has implemented. Travelers leaving China for Macau are only allowed to carry US$5,000. High rollers who wish to gamble more than this amount must therefore have access to a credit line at Macau. This credit line is normally provided by the junket operator.
The “Bate-Ficha” business model has allowed the Chinese triads to infiltrate casino gambling in Macau. Their involvement is at 2 levels:
1) As third party operators of the “VIP” rooms
2) As junket operators.
For more details on the “Bate-Ficha” business and junket operations, please refer to the following url:
http://www3.austlii.edu.au/au/journals/QUTLJJ/2002/5.html
As in all business where the triads are involved, it is not possible to be in the “Bate-Ficha” business or be a junket operator without triad links. Intimidation and physical violence are frequently used as means to expand and secure business operations.
Within HK, there are currently 4 major triad groups. These are Sun Yee On, 14K, Wo Hop To and Wo Shing Wo. Stanley Ho has known links with Sun Yee On and 14K. Through his daughter Pansy Ho, he has set up a joint venture with the American casino operator MGM. The triad links were recently exposed by the gambling authorities in Atlantic City. As their business in Macau is so profitable, MGM chose to exit Atlantic City rather than end their association with Pansy Ho. For more details, please refer to this article by Bloomberg.
http://www.bloomberg.com/apps/news?p...d=aqZga1sai1Lg
From the Reuters article, it would appear the Las Vegas Sands has links with Wo Hop To. Since the Reuters article was published, the Las Vegas Sands has come under investigation by US gambling authorities. For more details, please refer to the following articles:
http://www.reuters.com/article/idUSTRE62S34020100329
http://www.reuters.com/article/idUSN3122976020100331
Technically the triads involved in these operations are NOT part of the casinos in Macau. The casino is therefore able to put up the fiction that they are “clean”. Under Singapore’s Casino Control Act 2006, the triads may however classified as associates due to the amount of power they exercise over the casinos. For more details on the Casino Control Act 2006, please refer to the following url:
http://statutes.agc.gov.sg/non_vers...ONTROL ACT 2006 &date=latest&method=part&sl=1
At the heart of the triad involvement in Macau casino gambling is the “Bate-Ficha” or “dead chip” business model. Under this business model, the casino operator sells a large number of “dead chips” to a third party. In casino parlance, “dead chips” are gambling chips which can only be used to play casino games; they cannot be exchanged for cash. Such “dead chips” are usually sold at heavily discounted rates.
The third party which purchased the “dead chips” are usually given a “VIP” room within the casino. The third party then proceeds to attract gamblers to this “VIP” room where they will re-sell the “dead chip” to gamblers at a profit.
To attract gamblers, the third party normally works with junket operators. The junket operators are crucial for the success of Macau casinos due to the strict currency controls China has implemented. Travelers leaving China for Macau are only allowed to carry US$5,000. High rollers who wish to gamble more than this amount must therefore have access to a credit line at Macau. This credit line is normally provided by the junket operator.
The “Bate-Ficha” business model has allowed the Chinese triads to infiltrate casino gambling in Macau. Their involvement is at 2 levels:
1) As third party operators of the “VIP” rooms
2) As junket operators.
For more details on the “Bate-Ficha” business and junket operations, please refer to the following url:
http://www3.austlii.edu.au/au/journals/QUTLJJ/2002/5.html
As in all business where the triads are involved, it is not possible to be in the “Bate-Ficha” business or be a junket operator without triad links. Intimidation and physical violence are frequently used as means to expand and secure business operations.
Within HK, there are currently 4 major triad groups. These are Sun Yee On, 14K, Wo Hop To and Wo Shing Wo. Stanley Ho has known links with Sun Yee On and 14K. Through his daughter Pansy Ho, he has set up a joint venture with the American casino operator MGM. The triad links were recently exposed by the gambling authorities in Atlantic City. As their business in Macau is so profitable, MGM chose to exit Atlantic City rather than end their association with Pansy Ho. For more details, please refer to this article by Bloomberg.
http://www.bloomberg.com/apps/news?p...d=aqZga1sai1Lg
From the Reuters article, it would appear the Las Vegas Sands has links with Wo Hop To. Since the Reuters article was published, the Las Vegas Sands has come under investigation by US gambling authorities. For more details, please refer to the following articles:
http://www.reuters.com/article/idUSTRE62S34020100329
http://www.reuters.com/article/idUSN3122976020100331
Technically the triads involved in these operations are NOT part of the casinos in Macau. The casino is therefore able to put up the fiction that they are “clean”. Under Singapore’s Casino Control Act 2006, the triads may however classified as associates due to the amount of power they exercise over the casinos. For more details on the Casino Control Act 2006, please refer to the following url:
http://statutes.agc.gov.sg/non_vers...ONTROL ACT 2006 &date=latest&method=part&sl=1
