If you’ve been following the casino industry of the world’s biggest gambling hub, Macau, you’ll be aware of the pending charges that Billionaire Sheldon Adelson, founder and chairman of Las Vegas Sands Corp., will soon need to challenge.
The four and a half year Nevada case has been in the early stages for years, as Steve Jacobs, former Chief Executive Officer of the company’s Macau unit, continues to claim that he was dismissed illegally. According to the suit filed by Jacobs, he was fired from his executive position for refusing to go through with illegal demands, such as digging up information about high-ranking government officials in the Special Administrative Region of China that could be used to “exert leverage”.
According to Greg Doll, an uninvolved lawyer at Doll Amir & Eley LLP in Los Angeles, “There’s going to be some mudslinging.” Industry experts are in agreement that Jacobs is mostly likely going to bring up evidence that’s both sensitive and uncomfortable for Sands China and Adelson in particular.
Further allegations, which Adelson has denied, include that the 81-year old billionaire not only ordered the secret, less than legal investigations, but also that he personally approved a strategy for condoning prostitution at the Macau casinos. Sands maintains that Jacobs was dismissed for working on unauthorized deals and violating company policy.
The lawsuit couldn’t come at a worse time for Adelson, as Chinese President Xi Jinping has been extremely vocal about expanding his battle against corruption in the ruling Communist Party. This high level of scrutiny from Beijing has driven away many of the high rollers that helped build Macau into the global leader in total gambling revenue. Look for the capital to watch the results of the suit carefully as it enters its final stages.
Adelson has remained adamant that the allegations are “outright lies and fabrications”, pushing Jacobs to add a defamation claim against the billionaire. Though Las Vegas Sands has continued to deny wrongdoing, there’s little question that industry experts are on the edges of their seats in anticipation of what’s to come.
Despite the fact that the claims are centered on one of the company’s Asian properties, the feud is set to move forward in the state court of Nevada. As Adelson, the world’s 25th richest person, has continued to remain firmly against out of court settlements, it appears that this case is set to go fr the long haul.
Jacobs has previously mentioned in court filings that cited reports from a Hong Kong risk consultant that the case will expose “serious political and legal problems” surrounding Sands China’s business associates. In particular, the former executive alleged multiple connections with organized crime in the area, with one report indicating that an alleged organized crime leader was allowed to operate VIP rooms on the island.
As the possibility of Adelson taking the witness stand appears to be more likely, look for this case to have major impacts on the future of the gambling industry. With Macau casinos providing about two-thirds of the total revenue of Las Vegas Sands, any negative press could provide serious issues for the world’s largest casino operator.