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Asia Entertainment & Resources Message Board

  • drjackcar drjackcar Feb 8, 2013 8:47 AM Flag

    sadvest's post on LVS board....VERY IMPORTANT POINT

    In the wake of yet another article disparaging junkets the content of sadvest's post can not be over stated.

    "From the Barron's article........

    "Nomura’s Harry Curtis, meanwhile, noted that U.S. gambling companies do a good job of investigating junket operators, due to the “value of their concessions and U.S. licenses.”


    The small amount of stuff like money laundering that goes on happens in the second and third tier casinos, not the ones operated by US companies."

    I have mentioned this fact a number of times including in the last article I wrote for Seeking Alpha on whether there was really a crackdown on corruption happening in Macau. Beyond the checks the Macau gaming authorities do in licensing junkets in the first place, then monitoring their activities once they are in business, the casino companies themselves are extremely vigilant in making sure the junkets they do business with do not do anything to jeopardize their Macau (and US) gaming licenses.

    While I have no doubt some degree of illegality is present in Macau it is largely if not wholly absent from the US owned casinos. They simply would be risking too much for very little in return. Ask yourself this, for all the stories you have read about various forms of corruption in Macau when was the last time you read a story about it actually happening?

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    • I know you have been pounding the table about this but it gets overlooked all the time. People investing in LVS or MPEL may not realize it but they are in effect signing off on the legitimacy of AERL's operations.

    • In a few months, after the Macau gaming authorities have started imposing tougher rules for licensing junkets, after the last false rumor of a crackdown on junkets proves to be phony, and after AERL's business is not only not negatively effected by any of it but starts to get better, maybe the market will figure out all the fears they have had about investing in AERL are totally unfounded. Pretty much everyone expects the stock to go higher as RCT grows. I expect the multiple to grow too once irrational doubts gradually get replaced with knowledge and familiarity. Harry Curtis is right. Every time a casino hires a junket they put their gaming license on the line. They look in to the backgrounds of the principles and keep an eye on what the junkets are doing once they are hired. AERL wants to be around for a long time. Eventually they want to expand operations in to other countries. They aren't going to screw that up by doing anything illegal. You have to be pretty stupid to think they would.