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Tiny Chinese Enclave Remakes Gambling World

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

In March, a man the police described as an enforcer for the Taiwan-based triad United Bamboo began serving a life term for stabbing a man to death in a karaoke bar near the Strip. Prosecutors said 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 and report suspicious activity. The warning followed media reports that Sands allowed a man named as a triad member in a congressional report to move a $100,000 gambling credit from Las Vegas to one of its Macau casinos.

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

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

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

At a hearing in June, Burnett said it was "common knowledge 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 and 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 investigations are complete.

Conventional wisdom is that no U.S. companies will lose their licenses over the allegations, even if proven true. At worst, they could get fined, said Michael Paladino, of the credit rating agency Fitch. "They can handle that," he said, noting that the largest 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.
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