Hot copy: Stories that caught our eye this week from around the sector
Charlie Munger takes a swipe at crypto
Charlie Munger, the vice chairman of Berkshire Hathaway and Warren Buffett’s trusty sidekick, took a shot at the world of cryptocurrencies in a recent Wall Street Journal op-ed, calling for a ban on all things digital and decentralised.
The 99-year-old billionaire compared the crypto industry to a wild and woolly carnival ride, with little regulation and a lot of speculation.
He compared it to mining, where salesmanship is often key to convincing investors to finance digging for precious metals that may not exist.
He called crypto a “gambling contract with a nearly 100% edge for the house,” and suggested the US take a cue from China and put a stop to the madness.
Munger has never been a fan of the crypto world and has been vocal about his dislike for it in the past.
He has compared it to rat poison, a venereal disease, and even an open sewer.
He once stated that he wouldn’t want a crypto executive to marry into his family.
It seems like Munger and crypto are just not meant to be.
Will Chau’s downfall bring Macau to its knees?
Two weeks ago, we mentioned in Hot Copy that gambling promoter Alvin Chau was sentenced to 18 years in the slammer in Macau for charges including illegal gambling, fraud, and involvement in organised crime.
The court ruled in favour of the prosecutors on most charges, but acquitted Chau of money laundering.
The Financial Times argued this week that Chau’s downfall augurs change for Macau’s gambling industry.
“[With the trial] you have a portrait of how Macau gaming actually worked . . . Macau has always been a washing machine” but the case exposes the extent of it, the FT quoted Jorge Menezes, a Macau-based lawyer.
Chau’s illegal empire was found to have had a turnover of $105bn between March 2013 and March 2021.
According to the article, the size of Chau’s “business” reflects the fact that Chinese elite have typically used junkets to channel vast amounts of money out of the country, which enforces strict capital controls.
Moreover, casino executives described the estimate of Chau’s illegal gambling turnover outlined in the judgment as “conservative” and said Chau’s ability to attract the mainland elite to Macau was unmatched in the industry. “You could not avoid dealing with him,” one said.
Chau’s downfall — driven by Beijing’s determination to crush the escape of elite capital through Macau — is set to change the gambling business in the territory, as it would be a challenge to replace the loss of earnings from elite high rollers with mass market or non-gaming revenue.
Show your cards on player safety
The Times reported that British-based gambling companies operating in the US have been asked to let outside experts peek at their safeguards for vulnerable players after receiving criticism for a lack of transparency.
FanDuel, owned by Flutter Entertainment, BetMGM, part-owned by Entain, and DraftKings, are among the companies being questioned about their protection measures for online casino players.
The US National Council on Problem Gambling is curious why these companies have not committed to a third-party assessment and is asking the question: “What are they hiding?”
With digital casino games like poker now available in seven US states, the National Council has evaluated each state’s regulations and found four states – Delaware, Michigan, Nevada and West Virginia – falling short of the minimum standards advised by the council.
The National Council wants iGaming operators to show they meet strict standards, such as those adopted by New Jersey, in all states.
FanDuel, DraftKings, and BetMGM were quick to assure that they adhere to all customer protection and responsible gaming standards in each market they operate in.
But the National Council isn’t convinced: “If they are doing it, it would be very easy to be able to show people,” Keith Whyte, executive director of the industry-funded council, said. “But they don’t,” he added.