Triad Trouble

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U.S. Congress eyes Macau

A hearing of the U.S.-China Economic and Security Review Commission was held last month in Washington, D.C., and the Macau casinos were a focus. Members of the commission complained that there isn’t enough control of money laundering at the casinos, and questioned how the U.S. companies that operated casinos there were responding.

Commission member Jim Talent, a former Republican senator from Missouri, told the Wall Street Journal, “The truth is we really don’t have any idea what’s going on in Macau.”

The Journal story said the commission didn’t understand how the VIP rooms at the casino were organized, and who controlled them. A comment by Nevada Gaming Control Board Chairman A.J. Burnett didn’t help when he said it was “common knowledge” that the VIP rooms have “long been dominated by Asian organized crime,” or the triads, as they are known in China.

Burnett claimed that U.S. companies conduct “due diligence” on all VIP room operators active in their casinos and the GCB has never had to take action against them for violations. At the same time, the GCB has been active in looking into allegations, with the companies paying for investigations.

But, said Burnett, there are some “good things” about the triads because they are involved in “a lot of philanthropic activities.”

Commissioner Michael Wessel, a public-affairs consultant, was totally confused.

“This is so complex it reminds me of a Rube Goldberg-style equation,” said Wessel. “It appears to me that there is so much slipping through the cracks.”

While Burnett says the mass market is growing in Macau, thereby reducing the importance of the VIP rooms, revenue from those rooms still accounts for 70 percent of all gaming revenues in the SAR.

When Daniel Glaser, the Treasury Department’s assistant secretary for terrorist financing, appeared to answer questions, several commissioners suggested to him that the department place a higher priority on its scrutiny of the Macau gaming market.

“I’m not sure the companies are looking as deep as they need to in their own organizations and the profits are driving their activities,” said Wessel. “It’s worth some stricter scrutiny.”