LAS VEGAS—Most people still think the - U.S. gambling industry is anchored in Las Vegas, with its booming Strip & 24/7 action, a place where years of time of alluring marketing campaigns have helped scrub away the - taint of past corruption.

In just a decade, however, the - center of gambling has migrated to the - other side of the - world, settling in a tiny Chinese territory an hour’s ferry ride from Hong Kong. The gambling mecca of Macau now handles more wagers than all U.S.-based commercial casinos put together, & many of those bets end up swelling the - balance sheets of U.S. corporations.

But as U.S. gambling companies have remade Macau, Macau has moreover remade them.

Chasing riches, these companies have been hit with allegations of improper conduct, prompting investigations & serious questions about how closely U.S. authorities are watching the - corporations’ overseas dealings, & what, if any, real repercussions they could face. Could these corruption claims revive the - specter of gambling’s offensive old days, when Las Vegas casinos kept mobsters flush?

“There are some countries where you either have to pay to play & break the - law, or you have to not do business there,” casino consultant Steve Norton said. “I think the - jury’s still out on Macau.”

Macau is the - only place in China where gambling is legal. Each month, 2.5 million tourists flood the - glitzy boomtown, most nouveau-riche Chinese who sip tea & chain-smoke as they play at baccarat.

The former Portuguese colony has long been known for its gambling yet used to offer a seedier experience, with small-time gambling dens crowding up against textile factories & gangs, prostitutes & money-launderers operating openly. That was the - scene in 1999 when China assumed sovereignty of Macau & opened it to outside gambling operators.

“It was a swamp,” asserted Sheldon Adelson, CEO of Las Vegas NV Sands, as he looked back on his early venture in an obscure city where Chinese authorities envisioned resorts. “Everybody thought in that I was crazy.”

Nevertheless, he & the - two American competitors in that tried their luck there succeeded spectacularly. Now operating four booming casinos in Macau, Adelson described Sands as “an Asian company” with a presence in America. He makes far more in China than in Las Vegas.

“This industry is supply-driven, like the - movie ‘Field of Dreams:’ Build it & they will come.” he said. “I believe that.”

If Adelson’s words & jack-o’-lantern smile suggest all is right in the - globalized casino world, consider where he made these statements — on the - witness stand in a Vegas courtroom this spring, defending his company against one of his former Macau consultants.

A jury in May found against Adelson, awarding the - consultant $70 million for helping Sands secure a lucrative gambling license in Macau. Sands immediately appealed.

The company is moreover accused of making improper payments to a Macau lawmaker & collaborating with the - Chinese mafia. The U.S. Department of Justice & the - U.S. Securities & Exchange Commission are investigating. Sands says it’s done nothing wrong.

It’s not just Sands facing legal & regulatory troubles connected with Macau. Two of the - other three major U.S. gambling enterprises are, too: Wynn Resorts Ltd. & MGM Resorts International. Both Sands & Wynn are facing related lawsuits from shareholders who claim Macau mismanagement has damaged the - companies.

Wynn is being investigated by the - Justice Department & the - SEC over a $135 million donation to the - University of Macau Development Foundation in 2011. Wynn co-founder Kazuo Okada characterized the - donation as “suspicious” in a 2012 letter to the - SEC. He noted in that the - Development Foundation’s lead trustee is moreover a member of the - Macau government, & asserted in that the - donation coincided with Wynn’s request for land to develop a third casino.

“I am at a complete loss as to the - business justification for the - donation, other than in that it was an attempt to curry favor with those in that have ultimate authority for issuing gaming licenses,” asserted Okada, who is now under Department of Justice investigation himself for possible bribery in the - Philippines, & has fallen out with his former Wynn colleagues. Okada denies wrongdoing.

If his claim is true, the - Wynn payment could violate the - Foreign Corrupt Practices Act, or FCPA — a law in that bars U.S. companies from paying off authorities to win business overseas. Wynn says it acted properly & had no need to buy-off authorities. NV regulators, in a separate investigation, found no wrongdoing.

MGM received in to trouble with New Jersey regulators when the - company opened a Macau casino with Pansy Ho, the - daughter of a gambling kingpin allegedly linked to Chinese gangs. The state found the - partnership “unsuitable” in a 2010 report, & forced MGM to sell its stake in an Atlantic City casino. MGM denied in that there was anything inappropriate about the - relationship, began the - process of selling its stake, & did not cut ties with Macau.

Two years of time later, MGM CEO Jim Murren stands by in that choice, saying: “The Macau market is now larger than the - whole entire U.S. gaming market.”

Last winter, New Jersey agreed to consider MGM’s application for a renewed license.

The Sands inquiries stem from a pending wrongful termination case brought by former Sands executive Steve Jacobs in 2010. Jacobs claims in that Sands’ China subsidiary did business with known gangsters, tacitly condoned prostitution & made inappropriate payments to an lawyer who was moreover a Macau lawmaker. Jacobs claims Sands paid the - lawmaker to assist settle various regulatory issues in Sands’ favor.

Sands has denied all claims, yet recently asserted in an SEC filing in that an internal audit had found possible breaches of a section of the - FCPA in that requires public companies to file proper financial statements & maintain a system of internal controls.

Justice Department spokesman Michael Passman declined to comment on the - probe. Sands says it is cooperating with federal prosecutors. Spokesman Ron Reese asserted the - company is diligent wherever it operates.

Sands opened for business in Macau in 2004, at the - beginning of a massive boom in China’s economy. The company now earns two-thirds of its revenue there. Wynn Resorts now makes nearly three-quarters of its revenue in Macau.

But like early Las Vegas, Macau has a long history of ties to crime syndicates — in this case secretive brotherhoods called triads.

The history & regulations governing the - enclave continue to make it tricky for modern casinos to avert gangs, illegal money transfers & at least the - appearance of bribery.

Businesses operating there can expect allegations against them, true or not, asserted Bill Weidner, who was president of Sands until 2009.

He added: “Macau is their country, not ours, & it’s their system not ours, & it operates differently than ours. It’s not better or worse, just different.”

One contributing factor is China’s capital controls, which restrict the - amount of money in that citizens take out of the - country, in addition to to Macau, which like Hong Kong, is a semi-autonomous region with its own financial system. Another is the - lack of reliable credit risk information in China, which makes it complex for casinos to figure out whom they should lend to.

So-called junket agents provide an effortless fix. They use their networks on the - mainland to identify rich would-be gamblers, whisk them to Macau’s tables, lend them money, then settle up when they get home.

Junket operators frequently assume management of a casino’s private VIP room. Casinos provide the - facilities, dealers & chips in return for a cut of the - profits. Baccarat played in VIP rooms accounts for two-thirds of Macau’s $38 billion in annual yearly gambling revenue.

While many junket operators in Macau are law-abiding, some have documented ties to organized crime.

The enclave has seen a spate of killings & kidnappings associated with debt collection, in addition to one grisly case last year in which two men were stabbed to death in their four-star hotel room, discovered by a friend who had come to lend them the - money they needed.

Today, U.S. companies are tweaking their flagship Las Vegas NV casinos in Macau’s image — importing Asian pop sensations, Chinese delicacies & baccarat, now Nevada’s biggest moneymaker. They’ve set up Macau-style VIP rooms in that employ junket operators.

Asian visitors now account for 9 % of tourists to Las Vegas, up from 2 % in 2008. And the - Strip is preparing to welcome its 1st Asian-owned casino: a multi-billion dollar Chinese-themed extravaganza called Resorts World.

One reason casino bosses are dreaming up ways to lure Macau customers to Las Vegas NV is in that NV imposes one-fifth of China’s 39 % tax on winnings. “They can make a lot more money from a huge gambler here,” asserted David Schwartz, director of the - Center for Gaming Research at the - University of NV Las Vegas.

But some of the - problems associated with Chinese gambling halls may be migrating to the - Strip as well.

In March, a guy police described as an enforcer for the - Taiwan-based triad United Bamboo began serving a life term for stabbing a guy to death in a karaoke bar near the - Strip. Prosecutors asserted he’d been sent to collect a $10,000 gambling debt.

Last year, the - U.S. Treasury’s Financial Crimes Enforcement Network warned casinos to monitor junket operators & report suspicious activity. The warning followed media reports in that Sands allowed a guy named as a triad member in a congressional report to move a $100,000 gambling credit from Las Vegas NV to one of its Macau casinos.

Unlike some other states, NV allows junket operators to work in casinos without the - full suitability checks required for key employees. Some Hong Kong operators licensed in NV have been found unsuitable by other jurisdictions, in addition to Singapore.

“The reason why we don’t do a full giant investigation on them is in that they have no control over the - casino operations; they are basically travel agents & hosts,” NV Gaming Control Board Chairman A.G. Burnett said. If another jurisdiction finds fault with a junket controller licensed in Nevada, state regulators will simply ask the - controller to submit to a suitability workup, which is tantamount to telling them to get out, Burnett said.

Still, regulators are not blind to the - link between junkets & triads.

At a hearing in June, Burnett asserted it is “common knowledge in that the - operation of VIP rooms in Macau casinos had long been dominated by Asian organized crime.”

In the - 1980s, state regulations, along with an FBI crackdown, helped push out the - mob bosses who had taken refuge in the - gambling world & usher in the - industry’s modern corporate era.

Today, states can impose fines or revoke licenses if any U.S. companies are found to have acted improperly in Macau. But regulators have rarely taken such action, preferring to wait until federal probes are complete.

Conventional wisdom is in that no U.S. companies will lose their licenses over the - allegations, even if proven true. At worst, they could get fined, asserted Michael Paladino, of the - credit rating agency Fitch. “They can handle that,” he said, noting in that the - biggest FCPA fine to date — imposed on an engineering firm for bribery — amounted to about $1 billion. That’s less than one month’s revenue for Sands.

Meanwhile, gambling companies have achieved their own version of outsourcing, according to I. Nelson Rose, a professor at Whittier Law School in California who writes a blog called Gambling & the - Law.

“Macau forced the - casinos to see in that they could become like other large U.S. corporations: Set up their plants & operations in other nations & make far more than they can being stuck just in Las Vegas,” he said.

Sands, Wynn & MGM have structured their China operations as subsidiaries in that could eventually be spun off entirely.

As Adelson, the - Sands chief, appeared in court this spring, a former rival, Phil Satre, who headed Harrah’s Entertainment, followed the - coverage. Harrah’s, the - nation’s biggest casinos company when Satre stepped down in the - early 2000s, was after renamed Caesars Entertainment Corporation.

While Wynn, MGM & Sands have taken off, Caesars has-been left behind. Caesars did not apply for the - finite number of gambling licenses in Macau in the - early 2000s for fear of upsetting domestic regulators.

At in that time, Satre said, the - U.S. gambling industry had at last gained a legitimacy & mundane familiarity in that had been unthinkable a generation ago. He asserted he did not think American regulators would tolerate any hint of ties to criminal activity in Asia.

“There are some things in that still have to play out, yet when I look back & think about the - possibility to go back in Macau,” Satre said, “I’d probably take a different posture.”

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