Macau Legend Development’s desire to tap into all facets of Macau’s gaming bonanza may prompt regulators to redefine who does what in the world’s top casino jurisdiction. The new year was barely a few hours old when Macau Legend alerted the Hong Kong Stock Exchange of its plans to “diversify its business and indirectly participate in the gaming promotion business.”
Macau Legend currently operates the Pharaoh’s Palace casino at the Landmark Casino Hotel and the Babylon Casino at the Macau Fisherman’s Wharf property, which is also the site of an under-construction project called Prague Harbor View. Lacking its own casino concession, Macau Legend’s gaming facilities operate under a “service agreement” with Macau casino concessionaire SJM Holdings.
Problem is, Macau regulations stipulate that the fat cats who wager fat stacks at Macau’s VIP baccarat tables do so with the understanding that their business relationship is with Macau’s licensed VIP gaming promoters, not the casino with which that middleman has a relationship. This is intended to insulate the casinos from the bother of making loans and chasing gambling debts, which are legally unenforceable on the Chinese mainland.
Macau Legend says some of the VIP tables at its casinos intend to blur this dividing line via “a new licensed gaming promoter to be established by Mr. Yip Wing Fat, Frederick, an independent third party and a member of our senior management team.” The company’s recent Hong Kong filing acknowledges that Macau regulators may not see how a member of Macau Legend’s senior management could be considered an “independent third party.”
The question of who gets to participate in Macau’s VIP gaming operations was already the subject of some debate after the reemergence of Wan ‘Broken Tooth’ Kuok-koi, the former 14k triad leader who was released from Coloane Prison in December 2012 and immediately announced plans to participate in an unspecified VIP gaming room’s junket operations. This prompted questions as to what it took to be barred from becoming a junket operator, which led to the disclosure that there was no accepted legal definition of ‘junket operator’ despite Macau regulators having issued 235 ‘junket operator’ licenses.
Regardless of how regulators rule on Macau Legend’s desired dual nature, the company’s summer 2013 initial public offering helped one of its leading shareholders make Forbes magazine’s Hong Kong’s 50 Richest list. Ina Chan, the ‘third wife’ of real-life Macau legend Stanley Ho, came in at #46 on Forbes’ list with an estimated net worth of US $1.1b. In addition to her 13% stake in Macau Legend, Chan (pictured above) also holds a stake in SJM’s parent company Sociedade de Turismo e Diversões de Macau SA.
