Dore employee may have colluded with others in theft

Sterne Agee said according to its checks the female cage employee accused of stealing from junket operator Dore may have colluded with others to abscond with “several hundred million HKD.” 

Analyst David Bain said checks cite HKD270 million ($35 million) as being missing from the Dore Group, far from the up to $2 billion in some reports. Police notices were officially filed by 24 investors and depositors, said Bain in a note.

“We believe the apparent theft at Dore Group, a junket operator at Wynn Macau, will likely only have a minor negative impact on VIP market GGR as we see VIP softness (since ~May of CY14) as demand driven, not credit driven.”

The note adds that Dore is a separate entity from Wynn Macau and that Wynn’s market share increased to 10.5 percent as of September 13 versus its 8.2 percent share in the first 6 days of the month.

“Still, the weekend saw a disheartening site with Dore Group depositor / investor protests in front of Wynn Macau.”

“We believe 6 junkets account for over 80% of the VIP market in Macau (the list does not include Dore) and those groups are mostly capitalized with retained earnings, not new investors. Still, we believe the high press levels of the Dore situation could have a minor chilling effect with investors in smaller junkets, likely impacting 3rd party casinos (under the SJM and Galaxy umbrella), and less so those under our coverage list.”

In  a note by Bernstein Research, analyst Vitaly Umansky said about 30 protesters assembled outside Wynn Macau casino on Saturday, claiming that Dore had rejected their withdrawal of deposits. 

Wynn Macau made a voluntary announcement subsequently confirming that Dore owes no money to the company and continues to operate at Wynn Macau. 

“Our channel checks indicate that Dore’s VIP area was operational at Wynn over the weekend.”

“The key risk is that there is contagion to other junkets over concerns from agents and junket investors about junket liquidity. There is concern in the market that the Dore situation is more tied to liquidity associated with underground banking and the facilitation of currency movement from China into Macau and Hong Kong.”