How The Marina Bay Sands Scandal Rocked The Gambling Industry
The gambling sector has faced many challenges in recent years. Singapore is one of the most affected markets.
23:30 12 December 2021
The gambling sector has faced many challenges in recent years. Singapore is one of the most affected markets. First of all it's important emphasizing that there are just two government-approved IR facilities in Singapore. When Sheldon Adelson opened up The Marina Bay Sands Casino more than ten years ago, he estimated a billion dollars of revenue annually. After the grand opening, Adelson’s estimation proved correct. However, only for one year.
In the second year of operation, returns fell by more than 30%. A scandal was the straw that broke the camel’s back, with profits diminishing even further. When the pandemic came shortly thereafter, it was the final nail in the coffin for the ten-year payback period plan. Here is how it impacted the whole gambling industry.
What Happened In the Singapore Casino
Chinese businessman Wang Xi filed a lawsuit against the casino in 2019. The investigation during the suit revealed a host of issues to the public eye. It revealed that Xi’s case is only the tip of the iceberg. More than $7 million of Wang’s money was stolen. It involved the forgery of documents by the casino staff. That way, they were able to authorize illegitimate third-party transfers.
Legitimate third-party transactions are permitted by casinos. They were all too prevalent not long ago at any casino around the globe. In essence, players use them as a substitute for a formal money transfer. They send money directly to one another to cover their expenditures.
Third-party transfers were popular for two reasons. The first is the difficulty of withdrawing money from China. This is a major one because the Chinese account for about two-thirds of players in Singapore casinos. An even larger percentage in Macau. The second reason is money laundering. Due to the nature of these transactions, it’s possible to exploit them.
Consequences of the lawsuit are found all across the gaming industry. Keita M, the editor of a popular casino blog Japanbets, recently published an article detailing implications of the scandal on online casinos. Online casinos continue to grow in popularity. Customers flock from other forms of gaming, mainly due to security advantages. The highly encrypted payment methods used nowadays eliminate the human aspect. This prevents the fraud that happened in Marina Bay Sands from happening again.
The United States Department of Justice is conducting an investigation into both Las Vegas Sands and its Singaporean casino, Marina Bay Sands. This is not the first time this has occurred, and it is unlikely to be the last one. The DOJ is keeping a close eye on this case. They are very skeptical of Sands' treatment of high-rollers and gambling whales.
Singapore's authorities are also looking into the murky waters of the unlawful money flow and the many theft cases. Following Wang Xi's court settlement, they identified a slew of other identical cases. Las Vegas Sands Corp plunged by more than 50%. Only after the pandemic restrictions were lifted in Asia, the stock appeared to be steady.
The practice of third-party transfers was severely restricted after it was brought to light. However, it was too late to quit the whole process. The controversy triggered investigations by several agencies. Over a thousand transactions being scrutinized. Sands denies any wrongdoing. They have since retaliated against "rogue" staff as well and executives who were looking into what was going on.
Facing The Consequences
Authorities and players alike took notice once the incident became well known in the gaming industry. Singapore's regulators have now implemented new anti-money laundering measures. The US DOJ is currently gathering evidence for further action. Their investigations came to a standstill with the outbreak of the pandemic. Once the casinos return to normal, the authorities will resume their work. They want to bring the process to a close.
It is expected that the casino will be punished by vast fines. Any individual manager will stand trial if suspected. The most important consequence of the scandal is the damage done to the industry.
Many patrons knew that shady operations were running behind their backs, but not the full scope. Then, their trust was violated by the casino’s exploits. This breaking of trust is the hardest for the casinos to recover from.
Why Players Shift To Singapore Online Casinos
When providing your banking details, you must be confident the business won't abuse your trust. Customers wouldn’t use eBay if their confidentiality or money were stolen on a routine basis. This loss of trust is sending an increasing number of players to safe online casinos instead of land based ones.
With Asia's rapid technological advancement, the entertainment trends are heading online. This is also true for iGaming. All kinds of entertainment may coexist. However, the previous two years have shown that online formats are now the favored method for many players.
This doesn’t mean that land-based casinos will have fewer total players. The number of gamblers globally is growing. In terms of percentages, a significant chunk of the population is shifting to convenient online gambling.
Incidents like the Marina Bay Sands scandal happen all the time. The gambling industry's overall market capitalization is projected to surpass a trillion dollars by the end of the decade. With so much money involved, such incidents are not likely to be a rarity.
Ultimately, it is up to the customer to choose the type of entertainment they desire, and from where they get it. Trust is the most valuable asset in the casino industry. The operators know that without it, no one will play. The full ramifications of what happened in Singapore are yet unknown, but all of the changes that have happened since are here to stay.