SkyCity countersues high roller for misleading and deceptive conduct

A bitter Adelaide court stoush over baccarat winnings offers a glimpse of the secretive world of high-rollers.

A multimillion dollar dispute between Adelaide’s SkyCity casino and a wealthy Chinese high-roller has laid bare the haphazard backroom dealings of the controversial gambling junkets now being phased out across the country after they were repeatedly used to launder money.

Linong Ma had accused ASX-listed SkyCity Entertainment of withholding $4.84m in winnings amassed during a gambling session at its Adelaide venue in May 2019. Despite accumulating $6.3m in winnings from playing baccarat over a week, Mr Ma alleges he received only $1.46m from the junket operators, Zhuangqian Fang and Xiongming Xie.

But in new filings with the South Australian Supreme Court, SkyCity says it did not have to pay Mr Ma the entirety of the winnings because it was governed by a “revenue sharing agreement” between the casino and Mr Fang. In response, Mr Fang alleges there was no valid deal at all.

A VIP gaming room at SkyCity Adelaide. Picture: Russell Millard

SkyCity Adelaide already faces an independent review of its affairs – following similar inquiries into the company’s larger rivals Crown Resorts and Star Entertainment in Victoria, NSW and Queensland – and is being investigated by financial crime watchdog Austrac. The company told the ASX that Austrac had already identified concerns about the management of high-risk customers.

While the dispute between Mr Ma, SkyCity and its junket managers is a separate matter, filings with the Supreme Court are a rare glimpse into the secretive high-roller gaming operation.

“The applicant is an experienced VIP gambler who was very familiar with casino junkets and revenue sharing programs,” the SkyCity filings read. “He was aware that his play at the Adelaide Casino was governed by the junket terms, or to the extent that he was not aware of the precise junket terms, he was aware that his play was subject to an agreement of that kind.

SkyCity Adelaide. Picture: NCA NewsWire / Naomi Jellicoe

“In particular he knew that at the conclusion of his play his winnings and losses would be accounted for in accordance with the junket terms or similar agreement, with any net winnings to be paid to, or at the direction of (Mr Fang) and after deduction of the costs of (SkyCity)’s expenses associated with the applicant’s attendance, including travel, accommodation and cash advances.”

However Mr Fang has distanced himself from the junket, claiming in his defence that the revenue sharing agreement with SkyCity was “never duly executed” and therefore never came into effect.

Further, he claims the junket agreement between himself and SkyCity was never approved by South Australia’s liquor and gambling regulator, and was therefore “void”.

Separately, Mr Xie – the second junket operator – claims that while he had organised two previous junkets for Mr Ma, he had no involvement in the Adelaide casino tour in 2019.

Junket operator Xiongming Xie

Despite this, he paid Mr Ma some $420,000 – part of the $1.46m payment made to him after the junket – to settle any potential dispute over the events that took place in Adelaide that year.Mr Xie claims he also made contact with SkyCity in an attempt to persuade it to release to Mr Ma a further $2.049m currently being held in a Supreme Court fund. SkyCity had attempted to transfer that money to Mr Fang to settle their junket agreement – but payment was not accepted.

In a separate claim against Mr Ma, SkyCity argues the high roller’s conduct during the junket visit -- including his acceptance of paid flights, accommodation, drinks and food, and the use of specially marked “non-negotiable” chips -- made it clear that he knew his winnings would be subject to a junket agreement between the casino and junket operator. And any suggestion that he wasn’t aware of those conditions made that conduct “misleading or deceptive and false”.

Both Liquor and Gambling Commissioner Dini Soulio and Austrac declined to comment on their investigations. A SkyCity spokeswoman said the company was “fully cooperating with the independent review”, and took its compliance responsibilities and obligations “very seriously”.

The SA inquiry was announced after a NSW review, headed by Adam Bell SC, heard evidence that Star Entertainment did little to end its relationship with Alvin Chau, boss of Chinese junket operator Suncity, even after it received a Hong Kong Jockey Club report about his alleged links to criminal gangs.

The Bergin inquiry found damning evidence of money laundering at Crown’s Melbourne casino. Picture: William West / AFP

Despite police charging people with dealing with the proceeds of crime in Suncity’s exclusive gaming salon at Star’s Pyrmont casino, the company continued to deal with Mr Chau and his associates.

Since then, both Star’s chief executive, Matt Bekier and chairman, John O’Neill, have resigned.

SkyCity shares closed at $2.46 on Thursday. They are down more than 15.8 per cent since December 31. The New Zealand-headquartered business also operates casinos in Auckland, Hamilton and Queenstown.