In an effort to determine how many gambling dollars were being lost to Macau, the Hong Kong Jockey Club last year commissioned a study by the Spectrum Gaming Group. Obtained by the South China Morning Post, the study revealed that VIPs from Hong Kong lost more than .5 billion annually (HK.5 billion) at Macau’s private VIP rooms in 2007.
Disturbingly, the report links the VIP rooms to increased gambling addiction and the growth of organized crime, called “triads” in China.
“At the minimum there is a relationship between the junkets and triads related to moving money and the collection of gaming debts,” the report says.
“The lack of an effective legal process for recovering gaming debt in China has led to an extrajudicial system where debt is collected via intimidation, threats, disruption of business, kidnapping of family members and other strong-arm tactics,” the report continues. “Because the court system in China cannot be used to resolve gaming-debt issues, as is the case in almost all other jurisdictions, the collection of gaming debt is left to the junket operator to resolve.”
Gambling debts are legally enforceable, however, in Hong Kong.
The report blamed inadequate regulation in Macau, where 151 firms and individuals are registered as official junket reps, when there are more than 10,000 people estimated to be involved.
Spectrum refused to confirm that it had undertaken the study and the Jockey Club would only say that a report had been commissioned but did not confirm that the Morning Post’s reports were accurate.
The Jockey Club has steadily been losing business in its racing and lottery operations, and the outlook isn’t good, according to the report.