{"id":6570,"date":"2013-11-22T17:09:52","date_gmt":"2013-11-22T17:09:52","guid":{"rendered":"https:\/\/forumarchives.tmsites.net\/index.php\/2013\/11\/22\/fed-panel-raises-concerns-about-gaming-lauundering-in-macau\/"},"modified":"2013-11-22T17:09:52","modified_gmt":"2013-11-22T17:09:52","slug":"fed-panel-raises-concerns-about-gaming-lauundering-in-macau","status":"publish","type":"post","link":"https:\/\/forumarchives.tmsites.net\/index.php\/2013\/11\/22\/fed-panel-raises-concerns-about-gaming-lauundering-in-macau\/","title":{"rendered":"Fed panel raises concerns about gaming Lauundering in Macau"},"content":{"rendered":"


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\n\tFireworks explode at the City of Dreams, left, one of the giant casino complex in Macau, Monday, June 1, 2009. City of Dreams is an urban entertainment resort, feature a 420,000 square foot casino with an underwater theme. It’s offer more than 500 gaming tables and 1,350 gaming machines. (AP Photo\/Dennis Ho)<\/span><\/p>\n

\tBy STEVE TETREAULT LVRJ https:\/\/www.reviewjournal.com\/business\/federal-panel-raises-deep-concerns-about-gaming-macau<\/a>
\n\tSTEPHENS WASHINGTON BUREAU
\n\tWASHINGTON \u2014 A federal commission studying U.S. relations with China recommended closer examination of gaming in Macau, saying weak financial controls in the district pose \u201csignificant risk\u201d of money laundering and terrorist financing.<\/p>\n

\tThe report issued Wednesday by the U.S.-China Economic Security Review Commission stopped short of saying U.S. security interests might be at stake. But commission Chairman William Reinsch said what it found \u201cwas disturbing and raises the question that possibility is out there.\u201d<\/p>\n

\tThe 12-member panel, composed of experts in trade, intelligence, defense and international affairs, said it \u201cdid not seek nor did it find evidence of wrongdoing by any U.S.-based casino company, either in Macau or in Las Vegas.\u201d<\/p>\n

\tBut several commissioners suggested that federal oversight or regulation of U.S. gaming companies doing business in Macau might be merited.<\/p>\n

\tThe commission recommended the United States press Macau, a special administrative region of China, to fix shortcomings in its financial regulations.<\/p>\n

\tPotential reforms could include a more effective process of freezing assets of suspected criminals, and reducing the high $62,500 threshold for reporting suspicious casino transactions.<\/p>\n

\tThe commission was formed in 2000 to make recommendations to Congress on national security and trade issues between the United States and China.<\/p>\n

\tThis was the first year in which it examined Macau, and the undertaking appeared to raise red flags with the gaming industry. Macau in 2006 surpassed Las Vegas as the world\u2019s largest gambling market. Its annual, officially reported gross gaming revenue in 2012 of $38 billion was six times that of the Nevada resort city. Experts have guessed the true gaming market could be six times larger than the official estimates.<\/p>\n

\tBut rapid inflows of money coupled with Macau\u2019s relatively loose regulations and strict privacy laws present large risks of money laundering, authorities have said. Also the casino industry relies heavily on loosely regulated junket operations that have a history of association with Asian organized crime.<\/p>\n

\tThree Nevada companies, MGM Resorts International, Wynn Resorts Ltd. and Las Vegas Sands Corp., operate some of the three dozen casinos in the booming district. Wynn and MGM made private presentations to the commission about controls and safeguards they have in place to mitigate risks.<\/p>\n

\tAt a commission hearing in Washington, D.C., in June, Nevada Gaming Control Board Chairman A.G. Burnett testified that the state believes that Nevada-affiliated casinos in Macau \u201coffer robust compliance with anti-money laundering protocols,\u201d but only to a point where junket operators assume responsibility.<\/p>\n

\t\u201cFrom our perspective of regulation in this matter, we have limitations,\u201d Burnett said.<\/p>\n

\tGaming companies weren\u2019t invited to testify. In a written dissent Wednesday, commissioner Robin Cleveland said their lack of input raised questions about the final product\u2019s credibility. As the report was being finalized, MGM Resorts and Wynn Resorts executives requested and were granted a private audience with the commission.<\/p>\n

\t\u201cWe have always and will continue to operate with high standards of compliance in meeting government requirements in both Macau and the U.S.,\u201d MGM Resorts spokesman Alan Feldman said.<\/p>\n

\tGaming leaders said the commission never traveled to Macau during the investigative process.<\/p>\n

\tGeoff Freeman, president and chief executive of the American Gaming Association, panned the report, calling it \u201cincomplete and widely dissented.\u201d He added that the report \u201cwas produced without meaningful input\u201d from American companies operating in Macau.<\/p>\n

\t\u201cThe Macanese regulatory environment continues to evolve,\u201d he said, \u201cand we are committed to a long-term partnership that enables our companies to thrive and meet the strict regulatory standards of each market in which were are licensed.\u201d<\/p>\n

\tIn August, Las Vegas Sands paid a $47.4 million settlement with federal prosecutors to avoid criminal money laundering charges at its Strip hotel-casinos eight years ago. Company spokesman Ron Reese said Wednesday the U.S. Attorney recognized enhancements the company has made to its anti-money laundering program.<\/p>\n

\t\u201cFor more than two years, we have consulted with our regulators worldwide as we devoted additional resources and adopted policies to include enhanced due diligence, how we accept money and how we pay out winnings,\u201d Reese said. \u201cWe are confident that our anti-money laundering program is designed to detect and prevent money laundering throughout our operations.\u201d<\/p>\n

\tReleasing the report on Capitol Hill on Wednesday, Reinsch said the panel agreed that \u201cthis was an area where more work was needed, more investigation was needed.\u201d<\/p>\n

\tIt is something the government, both state regulators and the federal government, need to look into in greater detail,\u201d Reinsch said.<\/p>\n

\tAlthough Reinsch said the commission\u2019s examination of Macau was \u201cfair,\u201d commissioners continued to carry out debate in addendums to the report.<\/p>\n

\t\u201cI do not see the issue of gambling in Macau and the potential legal risk to a few Nevada-based casino companies as a threat to the national security of economy of the United States,\u201d said Larry Wortzel, a retired Army colonel and former director of the Asian Studies Center and vice president of foreign policy at the Heritage Foundation, a conservative think tank.<\/p>\n

\tBut three others including former U.S. Sen. James Talent, R-Mo., said it may warrant some level of federal involvement.<\/p>\n

\t\u201cIt is our view that the underlying questions about the integrity of operations in Macau bear further scrutiny by Congress,\u201d they wrote in the report. \u201cAs part of this review, Congress should examine whether federal oversight and, potentially, regulation of the overseas activities of domestically licensed gaming enterprises is merited.\u201d<\/p>\n

\t\u201cThe question for Congress, and federal authorities, is whether U.S. gaming enterprises are being used as venues \u2014 knowingly or not \u2014 that advance the illegal activities of the Chinese triads.\u201d<\/p>\n

\tIn an interview, Talent said, \u201cThere is an enormous amount of money laundering going on, whether the American casinos are suffering from it, which is what this thing got caught up in.<\/p>\n

\t\u201cAnd we don\u2019t know what that money is used for after it is laundered,\u201d he said. \u201cIt may be terrorist money. It may be drugs. So there are clearly national security and law enforcement issues at stake, which is why the Treasury Department and the Department of Justice are looking at this all the time.\u201d<\/p>\n

\tLas Vegas Review-Journal reporter Howard Stutz contributed to this report. Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com<\/a> or 202-783-1760. Follow @STetreaultDC on<\/p>\n

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