Australian Crown Casino brings in AUD$2 billion from junkets, source says

This appeared in The Millennial Source

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An individual who works as a middleman for a company that connects wealthy gamblers to casinos, claims that they are responsible for almost AUD$2 billion flowing through the Crown Melbourne casino. The middleman (officially known in the industry as a “junket”,) works closely with the Australian casino group, Crown Resorts, and receives a commission for steering big spenders towards casinos under the Crown umbrella.

Currently, Crown Casinos is being investigated for selling shares to a Macau-based gambling group.

In 2019, Crown Resorts also made headlines for alleged connections to organized crime in Asia, including allegations of money laundering.

Billions flowing into Crown Casinos

The middleman, who has asked to remain anonymous, explained that they had a line of credit worth AUD$3 million with casinos across Asia and Australia. The middleman also added that the AUD$2 billion over the last three years was achieved in large part due to that credit line with Crown Resorts.

What is a junket?

Reuters explains that with casinos booming in Macau (the only place casino gaming is legal in Asia), junkets have become increasingly vital to the industry. In recent years, Macau has become the largest gambling destination in the world, outpacing even Las Vegas, Nevada.

In Asia, there are more than 190 junkets, which are publicly traded companies, including Sun City and the Hong Kong-based Rich Goldman Hold, Ltd. Each junket employs agents to seek out wealthy customers to direct towards the casinos.

With their cadre of big spenders, junkets ensure a base level of revenue is consistently coming into the casinos. VIP customers are responsible for 70% of the revenue in Macau’s casinos, so casinos attract them with “free accommodation, travel and other perks.”

The middleman who spoke with The Millennial Source said the resorts also rely on shows, events, free transportation, hotel rooms and tournaments to hold onto those big spenders.

Junkets are given credit by the casinos, which they then extend to their VIP customers. If the gamblers accrue debts at the casinos, it’s on the junkets to collect those debts.

As compensation, the junkets receive a percentage of the high roller’s chip turnover or a portion of the casino’s winnings from the gambling.

What is Crown Resorts?

The owner of Crown Resorts is James Packer, who Forbes reports is worth US$2.8 billion. Prior to Packer owning the company, it was run by his father, the Australian media tycoon Kerry Packer.

Legal inquiries into Crown Resorts

The inquiry’s broad reach includes investigating money laundering and the relationship junkets could have to organized crime. In July 2019, 60 Minutes Australia ran an investigative report claiming Crown Resorts was involved in sex trafficking, drugs, and money laundering in Asia.

Crown Casino’s board of directors took out ads in local papers in which they called the 60 Minutes report “deceitful,” “unbalanced,” and “sensationalized.”

Authorities are concerned that junkets are using their credit line to launder money for crime syndicates. In 2015, that is precisely what happened with Cheung Chi-tai, a former major shareholder with Neptune Group (now Rich Goldman Holdings, Ltd.). He was accused of laundering HK$1.8 billion attained through criminal enterprises.

Coronavirus affects the casino business

On February 6, ABC News in Australia reported that Melco Resorts was pulling out of the deal with Crown Casinos due to the coronavirus’ impact on tourism. Earlier this week, it was reported that Macau-based junkets were considering laying off agents due to the limited tourism resulting from the outbreak. This was after an already slower than expected year for the casinos due to the trade war between China and the US.

Originally published at https://themilsource.com on February 9, 2020.

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