Macao continues to be a large blessing and a small curse upon the U.S. casino industry. Earlier this month, the Internal Revenue Service acknowledged ramped-up scrutiny of the enclave, where money laundering is a persistent fear — especially in Washington, D.C.: “It was unclear if IRS-CI was probing the operations of one or more U.S. casinos in Macau for possible criminal prosecution for failing to police transactions for money laundering activity, although former federal law enforcement officials with experience conducting such investigations said earlier this week that that was a possibility.”
Scarcely had FinCEN boss Jennifer Shasky Calvery vocalized the peril of dealing with junket operators in Macao than they had a scandal of their
own. Junketeer Kimren Group is short $1.3 billion after shareholder Huang Shan disappeared with the money. Shan had been promising junket backers a 2.5% ROI — very high for Macao — if they invested with Kimren. Junketeers have consequently seen a big drop in their valuation. “Investors started to think — ‘maybe this isn’t worth all the brain damage,'” investment expert Jason Ader told Business Insider.
If there’s an upside, it’s that the Kimren scandal provides an incentive for casino operators to rely less on VIP rooms and more on the growing mass-market segment. It also vindicates those, like Sheldon Adelson, who bet big on the mass-market trade from the get-go.
No money? No problem! A certain, Roman-themed gaming concern “will have no trouble raising the finance for a world-class facility in 
Tokyo.” So said Caesars Entertainment CEO Gary Loveman, throwing a theoretical $5 billion on the table. “You can typically finance a very substantial portion of that value through the debt market,” said Loveman, who’s something of an expert on debt, having lumbered Caesars with $23 billion in long-term obligations. Boasted Loveman, “I financed dozens [of casinos] and the markets for casino finance are very strong.”
If Loveman were building casinos in Hell, Wall Street would have to follow him. For Caesars to make good on all that debt, it has to keep sinking wells for new consumer capital. Japan, it has been repeatedly predicted, could be a $40 billion a year market. If Caesars can get even a small share of that, it’s worth bondholders’ while to enlist in Loveman’s Nipponese campaign. He’s courting potential joint-venture partners, including Fuji Television Network Inc., Kajima Corp. and Mitsui Fudosan Co.
