Fallout from Dore Theft Continues

A Dore Entertainment cage cashier accused of stealing millions of dollars in money from Macau junket investors has left the once-booming business reeling, and may have endangered it altogether, according to a report.

Analysts expect 18th month of decline

The recent theft of millions of dollars from Macau junket operator Dore Entertainment has led to lengthy protests by former investors demanding the return of their money. The scandal may have crippled the industry indefinitely, according to a report by the Reuters news agency.

For the past two months, frustrated investors have protested outside Wynn Macau where the junket operated, seeking remuneration. The investors blame Dore for the theft, in which a cage cashier stole at least HKUS$500 million (US$64.52 million), though some allege the total could be as high as HKUS$2 billion. They say Dore head Charles Heung Wah Keung, whom Reuters identified as “an alleged triad crime gang member,” should compensate them for their losses.

He “has taken the victims’ blood and sweat … Heung is devoid of a conscience,” said Lydia Chen, who lost millions of dollars she loaned to Dore in 2015.

The crime may also have permanently shifted the focus in Macau from the VIP business to mass gaming. That trend was perhaps best reflected at Melco Crown’s new $3.2 billion Studio City resort, which opened in October with no VIP gaming tables.

After the opening, Melco Chairman Lawrence Ho said Macau’s VIP sector has been “permanently and structurally changed,” in part by the Dore theft, along with the Chinese government’s crackdown on corruption, which scared off a number of high rollers and led to a recession that is now in its 17th month.

Macau Chief Executive Fernando Chui Sai On says the slump is a sign that Macau needs to develop an economy beyond gaming, reported Macau Business. “The downturn of the economy is certainly an opportunity for us to set up new regional and strategic polices. After 10 years of rapid development in which the gaming industry dominated the whole economy, it has now brought us some problems to solve,” Chui told legislators in a recent address. The Macau Daily Times reported last week that Nomura expects the downward trend that began last summer to continue when the November numbers are released.

There is good news amid the bad: GGRAsia reports that the use of Alipay, China’s largest online payment service, could have “positive longer-term implications” for the gaming industry, according to Union Gaming Securities Asia Ltd.

In September, in a further move to monitor gaming by its citizens, Chinese authorities announced new annual limits on ATM withdrawals made outside Mainland China using the China UnionPay Ltd electronic transfer system. Though Alipay could serve as an alternative, said Govertsen, “We suspect the people most comfortable with using Alipay are generally younger, and therefore not necessarily high value potential visitors to Macau.” The Macau Business Daily reported that more than 100 stores now accept Alipay payments in Macau.

“We would expect pawnshops to explore the Alipay option over time, especially if any further UnionPay restrictions are put in place,” said Govertsen. But, he added, “As it relates to casino operators, we would not expect them to offer Alipay Wallet in-person payments on casino floors given how contentious that would be—not to mention potential legal ramifications.”