Nevada’s long ballyhooed casino regulatory system is being tested as never before.
Recession-fueled budget cuts have stressed personnel inside the Gaming Control Board. A good argument can be made that GCB agents already have too much on their plates just in Southern Nevada alone.
But with Nevada-based casino giants going global in the relentless pursuit of their next billion in gambling profits, overwhelmed state regulators are faced with an even more daunting task of trying to keep an eye on complex operations from here to Macau. It’s a recipe for embarrassment.
Now a union website is calling out state regulators for being “either unwilling or unable” to police Nevada gaming licensees who do business with controversial casino junket and VIP room operators in Macau.
In a letter to Nevada Gaming Commission Chairman Peter Bernhard and Gaming Control Board Chairman Mark Lipparelli, the director of the International Union of Operating Engineers’ special projects department invites the regulators to take advantage of the more than 600 pages of investigative information on the link between Chinese Triad-connected junket operators and Macau casinos. The pages are displayed at Casinoleaks-macau.com.
Although at least one casino corporation has brushed aside the website’s contents and called the concerns it raises “baseless,” the union’s press for increased scrutiny in Macau has become a national story with ABC News and the Wall Street Journal giving chase.
MGM Resorts International officials are bristling. In an official statement, they called the union’s concerns a reflection of “a complete lack of understanding of MGM’s extremely robust policies and procedures for evaluating the suitability of its gaming room operations in Macau.”
Easy for them to say. Las Vegas Sands, with three Macau casinos, finds itself being investigated by the U.S. Department of Justice and Securities and Exchange Commission for possible bribery of foreign officials. Casino titan Steve Wynn is defending his decision to donate $135 million to the University of Macau, and former Wynn Resorts board member Kazuo Okada has been accused of providing improper complimentary services to casino regulators from the Philippines.
While the union’s letter focuses on the presence of Wo Hop To triad leader Cheung Chi Tai in the middle of the Macau casino junket and VIP room business, connections first detailed by Reuters in 2010, the challenge to gaming regulators is much greater.
“The issue, while focused on Cheung Chi Tai, is not simply to remove him from any involvement and participation in Macau gaming,” the union’s Jeffrey Fiedler writes, “but rather to take on the real issue — the suitability of Neptune and its affiliates to do business with U.S. based gaming companies operating in Macau.
“It is our understanding that Cheung Chi Tai may have been the source of interest to you in the past when he was found to have been acting as a ‘credit guarantor’ with a Neptune affiliated entity. While he was apparently forced to give up that role, neither the Nevada Gaming Control Board nor the Macau Gaming Inspection and Coordination Bureau seems to have uncovered that extensive ties remain between Cheung Chi Tai and his associates and Neptune and its affiliates. In our opinion, the Macau authorities are disinterested in pursuing triad influence and involvement in the territory, and Nevada appears either unwilling or unable to perform the enforcement functions that have given it a reputation as a strict gaming regulator.”
Lipparelli was traveling out of the country Monday and unavailable for comment, but he recently told the Wall Street Journal that junket operators are “becoming an area of increased attention for us.” May we presume the controversy was high on his crowded to-do list before the Reuters report and the union’s website splash?
This isn’t a small shot across the bow of either Nevada’s casino giants or the state’s gaming regulatory experts. It has the potential to harm Nevada’s coveted reputation as a place whose casino licensees aren’t linked to organized crime.
John L. Smith’s column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/Smith