In a landmark decision last week, Macau’s Court of Final Appeal upheld a ruling that found Wynn Macau liable in part for debts incurred by one of its junket operators. The decision could make all casino operators responsible for debts unpaid by defunct junkets.
According to TDM Radio Macau, the appeals court (TUI) agreed with a 2018 decision by the Court of Second Instance, finding Wynn Macau and Dore Entertainment jointly liable for a HK$6 million (US$770,000) debt owed to a VIP customer.
The issue started in 2015, with the headline-making theft of up to HK$700 million (US$90 million) from Dore’s VIP room at Wynn Macau. Afterward, four players sought a combined HK$64 million (US$8.2 million) they claimed to have deposited with the junket.
Only one of the four proved his case, and the court found Dore solely responsible for the debt. But in 2018, the Court of Second Instance overturned that decision, ruling instead that Wynn and Dore were jointly responsible. And last week, the top court agreed.
“It seems clear and evident that gaming promoters will have to be included among the contracted entities for the development of the activities that comprise the concession … thus being equally evident that this is a legal public relationship. which characterizes the concessionaire’s subjection to a public law regime,” the ruling read.
Current legislation does not exclude “non-contractual joint liability towards third parties of the concessionaire.”
The potentially precedent-setting decision means Macau operators could be on the hook for future debts incurred by junket promoters that become insolvent.
In an article in the Gaming Law Review in March, António Lobo Vilela, former advisor to Macau’s Secretary for Economy and Finance, said such a decision would “reshape forever the relationship between casino operators and gaming promoters, finally understanding that the latent financial risks could eventually outweigh the perceived profitability of the VIP gaming.
“The decision is crucial to the Macanese gaming ecosystem and the way it is structured,” Lobo Vilela said. Macau’s VIP industry has been in decline for several years now. In 2013, there were 235 licensed junket operators; that number now stands at 85.
In a statement filed November 24 with the Hong Kong Stock Exchange, Wynn Macau said, “Based on advice from the Macau counsel of the company, the judgement is final and binding to all parties. The group is currently seeking legal advice from its Macau counsel in relation to the judgement.”
In 2016, courts ordered Chow, whose whereabouts remain unknown, to repay some MOP103 million of the stolen funds. The original plaintiffs said they invested in Dore Entertainment based on the promise of higher returns than those offered by regulated banks. It was all part of the swindle perpetrated by Chan.
