US Casinos Dotting Macau Can't Cash In

Gambling's red hot, but local middlemen take a huge cut
By Jonas Oransky,  Newser Staff
Posted May 22, 2008 5:51 PM CDT
US Casinos Dotting Macau Can't Cash In
Visitors enjoy a water fountain performance beside the Wynn Macau casino.   (AP Photo/Kin Cheung)

Casinos on the Chinese island of Macau create more gambling revenue than the ones in Las Vegas and Atlantic City combined, but US operators—permitted to set up shop there since 2004—are decidedly not rolling in the money. The Wall Street Journal looks at the bumps in the road for MGM Mirage, Wynn and Sands, and finds that local middlemen exert untold control over VIP players—and rake in huge commissions in the process.

These so-called junket operators extend credit to visitors, direct them to casinos, and then act as collection agents; they typically extract 40% of the casino’s take, while the government grabs another 40%. The US companies were loathe to hand out such big fees to the middlemen but have little choice given the stiff competition for gamblers. In fact, Sands recently raised its commission rate to 45%. (More Macau stories.)

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