The fact that an illegal bookmaker convicted in Macau and subsequently found guilty of money laundering in Hong Kong managed to acquire a 4% stake in MacauSlot, the monopoly sports betting service in Macau for gambling on soccer and basketball games, clearly wasn’t enough to prevent the Macau government from renewing MacauSlot’s operating licence for another year last week.
MacauSlot—full name Sociedade de Lotarias e Apostas Mútuas de Macau, Limitada–is majority owned by Dr Stanley Ho’s investment holding company, STDM. It had its sports betting licence renewed via a low-key announcement in the Boletim Oficial, Macau’s government gazette, last week. The extension runs until 5th June 2011 and comes in time for MacauSlot to offer soccer betting services for this summer’s FIFA World Cup in South Africa.
At the time of last week’s MacauSlot franchise extension announcement, the Macau government must have been aware of the fact that Yeung Chun, a former shareholder of MacauSlot and a former manager of a VIP gambling room at Dr Stanley Ho’s Casino Lisboa, had been convicted and was awaiting sentence in Hong Kong for laundering via Hong Kong’s HSBC bank the proceeds from a Macau-based illegal horse-betting operation estimated by authorities to have turned over HK$400 million.
The Macau authorities must have known in particular because Mr Yeung originally came to their attention in 2002 ,when he was arrested in Macau and subsequently convicted and jailed there for unauthorised bookmaking. Macau prosecutors said at the time that this particular illegal sports betting operation had brought in HK$187 million between 1999 to 2000. For such a person to have been able to become a shareholder of MacauSlot calls into question MacauSlot’s own internal controls and vetting procedures for approving shareholders. Questions must also be raised about the management of Macau Jockey Club given that Mr Yeung had a documented external business relationship with a senior official of the MJC at the same time as he was running illegal bookmaking on horse races.
The South China Morning Post reported that Mr Yeung was described in documents and Hong Kong Companies Registry papers submitted to a Hong Kong court—prior to his sentencing this week on the money laundering conviction—as a former business associate of Dr Ho’s wife, Angela Leong, and of Li Chi, managing director of Macau Jockey Club. The documented connection was that all three were shareholders in a company called Onshine Securities. In an unrelated matter in October 2005, Onshine Securities was reprimanded and fined HK$100,000 by Hong Kong’s Securities and Futures Commission for breaches of SFC financial rules, weaknesses in internal financial controls and insufficient supervision of staff.
Mr Yeung was also said in court to be a former business associate of Chen Yu, the chairman of Hong Kong-listed real estate company New World Development. Mr Chen also has a stake in MacauSlot. Mr Yeung had in the process of his business dealings also managed to acquire stakes in Casino Lisboa’s Club VIP betting room and the New Club VIP room, the Hong Kong court heard.
Hong Kong District Court sentenced Mr Yeung to 36 months in jail. He also agreed to a confiscation order on nearly HK$85 million of personal assets.
