Melco under scrutiny by the officials.
Gambling behemoth Melco from Hong Kong comes under intense inspection from the Cyprus gambling regulator. At issue are the so-called junket operators, middlemen responsible for organizing VIP experiences at Melco's upcoming City of Dreams Mediterranean Casino. The casino is currently in development with a possible license hanging in the balance.
Concerning VIP Operations
Due to the casino's VIP business, Melco's name has appeared on the radar of the Cyprus Gaming and Casino Supervision Authority. Officials wish to delve further into Melco's junket operator activities. These operatives are responsible for setting up VIP packages for Melco's City of Dreams Mediterranean Casino.
The middlemen organize lavish VIP getaways for wealthy gamblers, offering free flights and accommodations in top-tier hotels. High-stakes gamblers are granted access to exclusive lounges, where significant amounts are bet. The middlemen themselves reap financial rewards from their clients' expenses. The business model has engendered controversy.
The City of Dreams Mediterranean Casino, Cyprus' first casino resort, is currently in the crosshairs of the authorities. Slated to open by late 2021, the casino is 75% owned by Melco and 25% by local company Cyprus Phassouri Ltd (CPZ). Over $500 million has been poured into the project thus far. The outcome of the investigation will dictate whether the casino can be commissioned.
Hired Independent Auditors
The Gaming Authority has appointed three independent auditors to perform a thorough due diligence on all of Melco's potential junket partners. Their task entails a review of all processes relating to Melco's VIP operations. The identities of the three companies remain unclear, but they hail from the US, UK, and Cyprus.
The Cyprus news source in-cyprus reports that the examination is a due diligence test, intended to ensure that these gambling partners have no ties to illegal entities. The primary aim is to prevent money laundering and the financing of terror organizations. The gambling authority added:
"We're determined to see Cyprus's casino operate according to international standards and with unwavering transparency, especially given the mounting international scrutiny of Cyprus due to the issuance of ID cards to individuals with criminal pasts."
This statement ties into the ongoing refugee crisis. Cyprus has become a prominent stop for migrants in Europe, with over 6,500 people seeking asylum there in 2019. The unprocessed asylum applications, numbering nearly 14,000, are piling up amidst local and EU efforts to manage the influx.
Junket Operators Under Scrutiny
Melco's junket operators have come under fire as their business model has been linked to criminal activities in recent months. Since September, the largest Chinese junket operator Suncity Group has been implicated in alleged casino kidnappings in the Philippines. VIP players were reportedly forced into gambling with escalating stakes under duress since 2017. Furthermore, they were threatened and detained in various Melco establishments.
Melco's involvement in the Australian gambling market could further backfire. In August, Melco was tangled in a scandal concerning Crown Resorts. The company faced scrutiny for its contentious relationship with junket operators, with allegations of $1.5 billion in money laundering.
It was further revealed that a group believed to be connected with Chinese crime syndicates had exploited the Crown Casino Melbourne's bank accounts and high roller rooms for their own purposes. The Australian consulate was also in the spotlight, accused of involvement in Crown Casino's illicit activities.
Melco and Crown's Shared Interests
This circle continues to expand. In September, the Australian gambling regulator ILGA announced a review of the license granted in 2014 for the Crown Resort Casino in Sydney. The review stems from Melco's cooperation with Crown Resorts, encompassing both their operations in Macau. However, the primary reason for the investigation concerns the sale of a 20% stake in Crown Resorts to Melco CEO Lawrence Ho of Hong Kong. Ho's father is associated with Chinese crime syndicates, and this connection threatens the validity of Crown Resorts' third license.
The chain reaction of negative press makes it unclear how deeply the Cyprus location will be impacted.
- Gambling giant Melco (Hong Kong) faces critical scrutiny from Cyprus' gambling regulator.
- The focus is on the inspection of junket operators, or middlemen who organize VIP experiences for Melco's City of Dreams Mediterranean Casino in Limassol.
- Melco's VIP business has come under the radar due to junket operators, who facilitate trips for wealthy customers, covering flights and luxury hotel stays as well as access to VIP lounges.
- The business model is often criticized for its potential ties to illegal activity.
- The City of Dreams Mediterranean Casino, Cyprus' first resort, is under review. Over $500 million has been invested thus far.
- The Cyprus Gaming and Casino Supervision Authority has hired three independent auditors to research all of Melco's potential junket partners.
- This due diligence check aims to confirm no association with illegal organizations, hindering money laundering and terror financing.
- The heightened scrutiny follows a tumultuous past during which the Suncity Group has been linked to casino kidnappings in the Philippines, whilst Crown Resorts has faced accusations of laundering significant amounts of money.
- The Australian consulate also faces scrutiny, allegedly involved in the criminal activities of Casino Crown Resorts.
- The ILGA (New South Wales Independent Liquor and Gaming Authority) announced an inquiry into Crown Resort Casino following questionable partnerships, including with Melco in Macau.
- The primary focal point is the sale of a 20% share in Crown Resorts to Melco CEO Lawrence Ho. His father's past connections with Chinese crime syndicates pose a problem.
- The repercussions are unclear for the Cyprus location.
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Source: www.onlinecasinosdeutschland.com
