This week’s installment of Inside Gaming looks at that MGM-Wynn merger rumor that has recently been passed around, a new development in a lawsuit involving Las Vegas Sands unearthing suggestions about connections to Chinese organized crime, and the IRS’s plans to revise the reporting of taxes for gambling winnings.
Cramer’s Claims About MGM-Wynn Merger Dismissed as Rumor-Mongering
Earlier this month, television personality Jim Cramer, host of the long-running program Mad Money on CNBC, reported “speculation” regarding a possible blockbuster merger between MGM Resorts and Wynn Resorts. Soon afterwards, Cramer’s financial news website TheStreet.com reported on the increase in price of shares of Wynn stock being connected to the report.
It’s all very interesting, but it’s also without substance, say most observers. “The notion of a Wynn and MGM merger is ludicrous,” writes Howard Stutz of the Las Vegas Review-Journal, summarizing the industry’s overall non-response to Cramer’s claim.
Stutz notes how Cramer’s claim lacked any sources, nor did it provide much in the way of details regarding the possible merger. Meanwhile The Motley Fool also considered the idea before concluding that while “it may be fun to speculate about a deal between Wynn and MGM... at this point it’s unlikely that one is imminent.”
MGM and Wynn have done business in the past, with Steve Wynn selling Mirage Resorts (including the Bellagio and Mirage) to MGM in 2000. In its response to the rumor, The Motley Fool concludes Wynn would have to be the purchaser in such a merger, with “empire building” and the getting back of the old properties the only possible motives.
“But financially, it doesn't make a lot of sense,” they add, “and he has two new resorts opening in the next few years, so his current empire is growing anyway.”
Read more about the rumor and the reality over at the Motley Fool.
Groups’ Motions Allege Connection Between Las Vegas Sands and Chinese Organized Crime
Also from the Las Vegas Review-Journal this week comes a report about developments in a wrongful termination case involving Las Vegas Sands Corp. and Sands China Ltd. that could lead to some interesting revelations regarding alleged ties between the Sands and “high-ranking members of Chinese triads” — i.e., organized crime groups.
Steven Jacobs was dismissed from his position as Sands China CEO in the summer of 2010, resulting in multiple lawsuits by Jacobs whose allegations include claims that Las Vegas Sands president and CEO and Sands China chairman Sheldon Adelson ordered him to pressure Macau government authorities improperly and to extort other officials. Jacobs was succeeded by Edward Tracy who served as the Sands China CEO for four-and-a-half years before retiring earlier this year, at which point the 81-year-old Adelson moved into the position.
According to the LVRJ, the British newspaper The Guardian and a nonprofit watchdog group called the Campaign for Accountability filed motions to unseal records in the case, asking District Judge Elizabeth Gonzalez of Clark County to make available reports of an investigator, Steve Vickers of Hong Kong. The motions suggest the “Vickers Reports” reveal “possible business ties between Sands companies and Cheung Chi Tai and Hueng Wah Keung, alleged organized crime figures in China.” As such, the reports are said to “involve matters of extreme public interest,” thus providing cause for the motions.
The LVRJ was unable to reach Sands attorneys for comment.
The motions note in particular Adelson’s significant contributions to political campaigns and lobbying efforts, thereby heightening the need for the public to know the source of his funds.
“Given the extent to which Adelson’s wealth derives from Macau casinos — and the extent to which the Macau casinos derive their profits from the junkets, which are controlled by the triads and are heavily involved in money laundering — it is quite possible Macau organized crime funds have wound up in the coffers of candidates for federal office and/or in the treasuries of so-called dark money groups supporting them,” argues the Campaign for Accountability.
Adelson’s significant campaign donations in the past (“Adelson was the largest single donor funding the 2012 presidential race”) and his stated intention to “spend significant amounts in the 2016 race” provide further reason to unseal the documents, says the watchdog group.
“Access to the requested documents will inform and enhance public awareness of Mr. Adelson’s role in electoral politics and provide the transparency necessary for the public to hold responsible the officials and candidates for public office who accept his money,” the Campaign for Accountability argues.
As we’ve been reporting here at PokerNews, gaming revenue in Macau has declined for 12 straight months. Various factors have been cited as reasons for the slide, although the most common has been the anti-corruption campaign of China’s president Xi Jinping.
Reforms by Jinping’s adminstration designed to eliminate corruption, money laundering, and other types of fraud have been said to limit the freedoms of casino junket operators whose moving of funds, settling of debts, and managment of loans helped bring many high-rollers over to Macau from the mainland to gamble. The watchdog group alludes to a reported link between Chinese organized crime and some junket operators, a connection that has also been alleged by international law enforcement authorities, notes the LVRJ.
Read more about both motions, the contentious history of Jacobs vs. the Sands, and those Chinese “triads” at the LVRJ.
IRS Considers Reforms to Taxing Gambling Winnings
Finally, the Internal Revenue Service is considering ideas to rewrite current gambling-related tax rules, including possibly lowering the threshold for mandatory reporting of slots and bingo winnings from $1,200 to $600, reports Bloomberg Business.
In advance of a hearing to consider newly proposed regulations, the IRS is considering a variety of possible changes to tax reporting rules for gamblers, although the one change getting the most attention currently is the proposal to lower the reporting threshold for casino jackpot winners.
Bloomberg notes that more than 14,000 have already submitted comments on the regulations, with most opposing the change. Casinos and the American Gaming Association have also voiced their opposition, with the AGA “argu[ing] the change would be an expensive hassle” requiring casinos “to update their systems and hire additional staff to handle the more frequent reportable jackpots.”
Some of the proposed changes could benefit gamblers, however, including those simplifying tax reporting rules including making it less difficult to report losses.
Daniel Sahl of the UNLV Center for Gaming Innovation told Bloomberg he didn’t believe the reduction to $600 to report winnings will be among the changes implemented. The hearing is scheduled for June 17.
Find out more about what Uncle Sam is considering with regard to taxing gambling winnings at Bloomberg Business.