The gambling mecca of Macau is, apparently, suffering a crisis of faith. A shareholder in one of Macau's top "junket" companies--the organizations that bring in high rollers and get a cut of the wagers for doing so--has taken a respectable $1.3 billion and disappeared.
The Chinese gambling industry is quaking as a result.
As it is, high-rollers in Macau go to VIP rooms to bet. The rooms are operated by "junkets" that take a cut of every wager. These companies' offer investors a share of so-called "rolling chip volume" as investments. Guaranteed returns of 1% to 2% are offered. Huang, a shareholder in the Kimren Group, was guaranteeing investors 2.5%. Apparently, having stacked some serious paper, Huang has taken the money and is running.
As a result, Macau's junket funding system is facing a crisis of faith. Some are calling this the "Lehman Brothers moment" of the industry. The event actually seems a little more Goodfellas. Now that the high-rollers are spooked, Macau is not what it was, apparently. Members of the emerging Chines middle-class are beginning to show up. The good old days of high-rolling Macau as it evolved through the profound boom in the Chinese economy is giving to a tamer, more middle-class, that is, banal and boring, Macau. It's not going to be as easy to abscond with $1.3 billion.
This is going to make a great movie one day. Here's the story.