Australian casino operator Echo Entertainment is relying on one of its joint venture partners for insights into the mind of the Chinese VIP gambler.
David Chiu (pictured), the Hong Kong billionaire whose Far East Consortium has partnered with Echo and Chow Tai Fook Enterprises on Echo’s in-development $3b Queens Wharf resort casino in Brisbane, has been educating Echo’s senior management on what makes the average Chinese VIP tick.
In an interview with the Brisbane Times, Chiu said he took Echo execs – including CEO Matt Bekier – on a tour of Macau casinos to “meet all our friends” and give Echo a sense of “how Chinese VIPs behave.” The tour didn’t include a stop at Melco Crown Entertainment’s City of Dreams, “because Crown did not want to show us.” Crown Resorts, which is part of the Melco Crown joint venture, is Echo’s biggest domestic rival.
According to Chiu, small details are often more important than the more obvious VIP perks. “High rollers drop $2 million, but they are very concerned about being overcharged for a coffee. For the Chinese it’s just as important they get a shark fin soup in a Chinese restaurant as it is a private jet turning up in Shanghai.” Chiu says Chinese VIPs “are not easy customers, but they are great customers,” mainly because they “lose a lot of money.”
Chiu brushed off suggestions that Macau’s lengthy gaming revenue slump was a long-term problem, noting that China’s economic growth may have slowed, but “we feel it will come back … and one thing we do know is that the Chinese love to gamble. That will not change.”
THE STAR’S ‘HUMAN ATM’ TOLD TO FORFEIT $1M
What may change is how those high-rollers fund their gambling at The Star, Echo’s flagship casino in Sydney. (Echo is in the process of rebranding itself as The Star Entertainment Group to reflect the Sydney casino’s importance.)
This week, the New South Wales Supreme Court ordered Sydney resident Li Ming Hu to forfeit nearly A$1m (US $733k) that had been seized by the Australian Federal Police (AFP) during their investigation of an underground credit network linked to high-rolling gamblers at The Star.
The Court heard that Hu provided loans directly to gamblers and also provided money to Yixion Chen, a licensed junket operator at The Star. The AFP claimed Hu had access to funds totaling $35m and loaned money to gamblers with an annual interest rate of 12% while paying no tax on the transactions.
In June 2014, Hu transferred $500k into a National Australia Bank account belonging to Chen. The AFP froze the money, suspecting it to be the proceeds of crime. With a gambler waiting at The Star with no credit, Hu dispatched a runner with a black bag containing $500k in cash, which was also seized by the AFP.
Hu filed legal papers in an attempt to get his $1m back but Justice Monika Schmidt ruled that Hu had lied while giving evidence. Adding insult to injury, Schmidt referred Hu to the Director of Public Prosecutions for possible charges relating to his testimony.