Wynn jointly liable for repayment of Dore VIP debt – Top court

The Court of Final Appeal (TUI) has upheld a ruling of the Court of Second Instance (TSI) that previously found gaming concessionaire Wynn Resorts (Macau) jointly liable alongside junket operator Dore Entertainment Co. Ltd for the repayment of a HK$6 million (US$747,482) debt to a VIP player, according to TDM Radio Macau.

TUI ruled against an appeal lodged by Wynn over the TSI decision and upheld the ruling that considered the gaming venue’s operator co-responsible for the refund of deposits lodged at Dore Entertainment, the public service broadcaster reported.

The case dates back to 2015 when junket operator Dore Entertainment Co., Ltd. was the victim of internal theft by casino cage manager Mimi Chow Ioc Mei, who left after stealing HK$700 million from the junket operator, which operated out of Wynn Macau.

In 2016, courts had ordered Ms Chow to repay some MOP103 million in funds owed to Dore.

At the time of the incident, several people claimed that they had invested in Dore Entertainment based on the promise of higher returns than those offered by regulated banks, but had lost their money because of the alleged incident.

Four of the involved pursued claims totaling HK$64 million, but three of them failed to provide the necessary documentation.

The fourth individual was able to produce a receipt showing a HK$6 million deposit made to the cage manager.

Because the deposit contract was made between Dore and the individual, the Court of First Instance (TJB) ruled that the junket operator was responsible for ensuring repayment of the debt, inclusive of court costs and interest on the deposit from September 2015.

However, in 2018, the TSI now ruled that Wynn Macau was jointly liable for a HK$6 million refund, a decision upheld now by the SAR’s top court.

A “crucial” decision

This court decision is seen by experts as a landmark ruling for the city’s casino industry. In an exclusive interview with Macau News Agency and Macau Business, former director of the Gaming Inspection and Co-ordination Bureau (DICJ) Paulo Martins Chan said that a final ruling by the top court on the Dore theft case would be crucial in defining the responsibility held by gaming concessionaires for the actions of junkets.

“If the concessionaire is found to be responsible, they will be very careful regarding the junkets and, in addition, the relationship with the junkets will also change. It all depends on the decision of the TUI,” Mr Chan told MNA and Macau Business magazine in June 2020.

Earlier this year, former advisor to the Secretary for Economy and Finance and gaming law expert António Lobo Vilela stressed that the decision would have “crucial” implications for the industry and for the junket sector in an article published in March, in Gaming Law Review.

Mr Lobo Vilela said in the article that a top court decision upholding the liability of the gaming operator would cause “an unprecedented and materially adverse impact on the robustness that casino operators enjoy in Macau”.

The gaming law expert concluded that “the worst-case scenario would be for gaming promoters, most of them incorporated as companies with the minimum registered share capital allowed by law and with no significant assets or no assets at all in Macau or elsewhere, to file for bankruptcy (if they do not have the means to, or do not want to, repay the amounts in custody), leaving to the casino operators the honoring of their obligations”.