Inside Asian Gaming

INSIDE ASIAN GAMING MAY 2018 54 “What may be considered as unquestionable evidence of a lack of good character in one place may simply be viewed as the cost of doing business in another.” the same. However, in the era of social media and fake news, one’s reputation has never been less dependent on his/her actual behavior. A better understanding of the issue would no doubt be beneficial for all industry stakeholders. If nothing else, it would allow for a better allocation of resources in maintaining the highest standards of suitability. Secondly, in an increasingly global industry it is imperative to discuss the implications of a person being found unsuitable to such person’s gaming interests or associations in a different jurisdiction. In fact, one’s adequacy to have a business association with gaming requires his or her conformance with societal expectations and norms. Despite our short memories and increased globalized existence, it is undisputable that these still vary according to time and location. What may be considered as unquestionable evidence of a lack of good character in one place may simply be viewed as the cost of doing business in another. A good illustration of the cross-border impact of a person being found unsuitable may be drawn from the Special Report of the Division of Gaming Enforcement of the State of New Jersey on its investigation of MGM’s Macau joint venture with Pansy Ho. The 2009 report recommended that MGM be directed to disengage itself from any business association with Ms Ho due to her alleged dependence upon her father, Dr Stanley Ho. In the conclusion of said report, Dr Ho was also found to be unsuitable due to his alleged connections with organized crime through the inception of the VIP business model in his company STDM’s casinos in the eighties and nineties. The VIP business model, which has since been adopted by all Macau gaming operators, was not simply a local idiosyncrasy, it was considered essential in sustaining Macau as a gaming destination. As some realists may argue, it was also, back in those days, a way to keep pervasive influences in society under control and maintain a certain balance in a local way of living which was highly dependent on gaming revenue. It was therefore unthinkable that the suitability of Dr Ho, who has a place in the history of Macau as Mr Wynn does in the history of Las Vegas, would ever be questioned in Macau on the grounds alleged by the Jersey Report. In the end, MGM announced it would stop doing business as a gaming licensee in New Jersey. Today, it still operates in Atlantic City through its Borgata Hotel & Casino. Ms Ho was also found suitable to do business with the company by both the Mississippi Gaming Commission and the Nevada Gaming Control Board. We will never know if the outcome of Ms Ho’s venture with MGM would have been different if she were found to be unsuitable to do business in Nevada. However, the Jersey Report serves to illustrate that the approach to suitability in gaming varies substantially from jurisdiction to jurisdiction. In fact, regulators around the world are far from having a gold standard on which to base their decisions to exclude unwanted individuals or entities from having business associations with gaming. The lack of international standards of suitability, at a time where the drivers of the industry are global corporations with businesses spread throughout a multitude of jurisdictions, has generated a regulatory maze, only navigable by investing heavily in people, tools and procedures. Some may argue that this is simply the cost of doing business in a highly profitable market. RULES OF THE GAME However, that does not preclude the industry from taking a step back from the tangle of license applications and suitability investigations and addressing the issues at its core. Why does suitability really matter? Who should be considered suitable? How can we assure that the industry is free from unwanted influences in a way that is transparent and fair to all its stakeholders? In the search for answers to these questions, it is relevant to understand how the two most successful gaming markets address the issue of suitability within their respective borders. The Nevada Gaming Regulations determine that a person New Jersey’s Division of Gaming Enforcement once declared Dr Stanley Ho an unsuitable gaming associate for local business – a finding considered unfathomable in Macau.