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Underground Junket Network Worth $250M Exposed in China
By Shane Addinall Nov 11, 2021 IndustryChinese police arrest 142 people linked to a network of black-market junket tours, funnelled to a Russian gambling resort. The illegal operation is worth $250 million, and authorities traced the network over 12 provinces in the country.Officers from the Chinese People’s Armed Police (PAP) busted a criminal junket syndicate, arresting 142 suspects across 30 cities. High-roller gamblers make use of underground junket travel agents to facilitate trips to casinos in bordering countries. Chinese authorities continue to clamp down on citizens who partake in any form of cross-border gambling.
It is illegal for Chinese citizens to take part in any games of chance, except for the National Lottery, and PAP has the authority to pursue offenders outside of the country’s borders. Authorities from the Heilongjiang and Jilin provinces led the investigation that cracked open a $250 million operation.
Tigre de Cristal, the Asian Gambler’s Oasis
The investigation uncovered the network of criminals working in 12 of China’s provinces. The operators arrange junket pleasure trips, to casinos outside the country, for gambling enthusiasts who want to wager without worrying about legalities. These junket tour operators (JTO) usually have a commission-based agreement with casinos for bringing groups to the facility.
Chinese high rollers used the underground tour guide for trips to Russia’s infamous Tigre de Cristal Resort. This casino resort is in a special economic zone in Russia, Primorye, and is near China’s northern border. Tigre de Cristal opened in 2015 and has since attracted countless wealthy Chinese gamblers.
To counter pressure on the foreign exchange rate, because of capital flight, Beijing does not tolerate those who promote and offer cross-border gambling. According to China’s Ministry of Public Security, approximately 1 trillion Yuan ($145.5 billion) leaks out of the mainland annually toward gambling activities. The Ministry of Culture and Tourism created a travel blacklist in 2020 with prohibited gambling destinations. It is not clear whether Tigre de Cristal is on the blacklist.
Exposing a Junk Network
Eighteen shell companies form part of the criminal network as well as 10 travel agencies, and several underground banks that help the gamblers with transfer of their money. Authorities confiscated approximately 4,000 bank cards and questioned 2,963 gamblers who used the yet to be named JTO. The shuttle service focused on exotic gambling destinations outside the Chinese borders and authorities exercising soft power in Cambodia and the Philippines, Tigre de Cristal was their destination of choice.
In September we saw Macau’s biggest JTO, Suncity, highly anxious after a 15% plummet in stocks. This followed as China moved to tighten their reigns on the gambling hub. This made Chinese gamblers scared to visit the world’s casino epicentre, said to be six times the size of Las Vegas. JTO companies like Suncity face extinction in areas like Macau, and Chinese gamblers find themselves in a corner. Macau remains the only legal area for punters from China. Junket operators are no longer allowed in the country.
Suncity owns close to 70% of Tigre de Cristal’s parent company, Summit Ascent Holdings Ltd. The JTO therefore has dominance at the Russian gambling resort. There has been no mention of Suncity in the reports, but in 2019 Beijing accused the company of illegally targeting Chinese citizens.
China targets not only businesses, but they also hold citizens accountable. In September 2021, 10 citizens received penalties to the value of $900,000 because they were complicit in money handling linked to gambling.
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