An individual who works as a middleman for a company that connects wealthy gamblers to casinos, claims that they are responsible for almost AU$2 billion flowing through the Crown Melbourne casino.
The middleman (officially known in the industry as a “junket”,) works closely with the Australian casino group, Crown Resorts, and receives a commission for steering big spenders towards casinos under the Crown umbrella.
Billions flowing into Crown Casinos
A middleman for a company whose purpose is to steer big-spending clients to casinos has revealed to TMS they were responsible for injecting AU$2 billion into the Crown Melbourne casino over a three-year period. In that same period, customers they directed to the casino lost AU$43 million, which netted the junket operator a commission of AU$17 million.
The middleman, who has asked to remain anonymous, explained that they had a line of credit worth AU$3 million with casinos across Asia and Australia. The middleman also added that the AU$2 billion over the last three years was achieved in large part due to that credit line with Crown Resorts.
“The Crown marketing office in Hong Kong, responsible for the China, Macau and Hong Kong markets, aim for AU$9 billion from all junkets in a single year.
“A conservative estimate would be that all the junkets would have brought in around AU$20 billion to Crown resort in the same three year period… They are about 10 Super junkets like me that partner with Crown,” the source added.
What is a junket?
A junket is a word that refers to both the companies that connect big-spending clients with casinos and the middlemen whose job it is to track down those clients for the company.
With casinos booming in Macau (the only place casino gaming is legal in Asia), junkets have become increasingly vital to the industry. In recent years, Macau has become the largest gambling destination in the world, outpacing even Las Vegas, Nevada.
In Asia, there are more than 190 junkets, which are publicly traded companies, including Suncity and the Hong Kong-based Rich Goldman Hold, Ltd. Each junket employs agents to seek out wealthy customers to direct towards the casinos.
With their cadre of big spenders, junkets ensure a base level of revenue is consistently coming into the casinos. VIP customers are responsible for 70% of the revenue in Macau’s casinos, so casinos attract them with “free accommodation, travel and other perks.”
The middleman who spoke with TMS said the resorts also rely on shows, events, free transportation, hotel rooms and tournaments to hold onto those big spenders.
Junkets are given credit by the casinos, which they then extend to their VIP customers. If the gamblers accrue debts at the casinos, it’s on the junkets to collect those debts.
As compensation, the junkets receive a percentage of the high roller’s chip turnover or a portion of the casino’s winnings from the gambling.
Crown Resorts runs two of Australia’s largest casino resorts, Crown Perth and Crown Melbourne, the latter of which was the first casino to operate under the Crown umbrella. Crown Resorts also has a casino in London, England. In addition to the casinos, the Australian resorts include a hotel, restaurants, bars, nightclubs, and entertainment venues.
The owner of Crown Resorts is James Packer, who Forbes reports is worth US$2.8 billion. Prior to Packer owning the company, it was run by his father, the Australian media tycoon Kerry Packer.
Legal inquiries into Crown Resorts
As reported by The Guardian, a legal inquiry into Crown Resorts was opened in January 2020 after nearly 20% of company shares were sold to Melco International, a resort company based out of Macau and Hong Kong. Crown Resorts had failed to alert authorities of the sale, which risked breaching the terms of its casino license.
The inquiry’s broad reach includes investigating money laundering and the relationship junkets could have to organized crime. In July 2019, 60 Minutes Australia ran an investigative report claiming Crown Resorts was involved in sex trafficking, drugs, and money laundering in Asia.
Crown Casino’s board of directors took out ads in local papers in which they called the 60 Minutes report “deceitful,” “unbalanced,” and “sensationalized.”
Authorities are concerned that junkets are using their credit line to launder money for crime syndicates. In 2015, Cheung Chi-tai, a former major shareholder with Neptune Group (now Rich Goldman Holdings, Ltd.), was accused of laundering HK$1.8 billion attained through criminal enterprises.