Would you want to go to a Floating Casino in Macau ?
It seems like the team over at Dragon Corp heard about all of the speculation happening in the ICO market and want to take it to a whole different level. When everyone is merely potentially gambling with ICO’s, they seek to take it a step further, why not literally gamble ? Why not go all the way and create a pure concept where gambling is the premise?
Dragon Corp wants to pursue this vision and they are seeking to raise $500 million (£377 million) in an ICO that will provide it’s buyers with cryptocurrency coins that can be traded for a set amount of gambling chips in a to be constructed at floating dockside casino in Macau.
They are clear to note that these buyers are not gaining any form of ownership in the ‘to be’ built casino. These buyers would only get tokens to exchange for coins to come to the casino and gamble.
There’s obviously various risks in the wild world of casinos.
The first issue for ‘would be’ token holders is that the territory of Macau has not created a proper legal framework for bitcoin services. Their close neighbors to the north, China has recently legally shunned ICO’s and shuttered their cryptoexchanges, and the debts that one carries under the nature of gambling are not enforced by Chinese law. As a way of navigating these tricky legal waters, the company has registered in the British Virgin Islands, the place where arbitration or potential court proceedings would take place if needed.
This, of course means that things from a legal standpoint are not so clear, making this a rather risky proposition for all involved.
To make matters a bit more murkier, the company has also witnessed gangster “Broken Tooth” Wan Kuok- Koi appear at some of their events. This is a bit disconcerting due to the fact that “Broken Tooth” is one of the fiercest gangsters in modern Chinese history. In 2012, he was released from prison after serving 14 years for illegal gambling, loan sharking, and his role in Macau’s 1990s turf wars (as reported by Business Insider).
His appearance at company events could cause more scrutiny for the company as the 14k Triad, the second largest triad group in the world is not to be scoffed at have gotten into many a scuffle with the law.
Dragon company states that “Broken Tooth is not involved in Dragon,” “Do we know him? We know of him. We know him. Not to a great extent. He came to the event introduced by someone else as a prominent figure in Macau … He is not involved in Dragon and he is not financing Dragon in any way” CEO Chakrit “Chris” Ahmad told Business Insider.
Junket Companies and Friction
Ahmad states, “The key that the Dragon Company is aiming to solve is the rule imposed by China that prohibits cash flowing out of china. Junket companies have come into solve this problem but this is somewhat of a hassle.”
In order to gamble in Macau, high-rolling customers pay junket companies in China to handle their trips to the former Portuguese enclave. Once in Macau, the junket then gives the gambler an equivalent stake in non-negotiable gambling chips. These chips can only be spent betting in the casinos, they cannot be immediately exchanged for cash. At the end of their trip, gamblers can exchange their winnings for cash, and that money is then handed back to them by the junket upon their return to China.
Chinese law is thus circumvented because the gambler’s money doesn’t really go anywhere — it stays with the junket in China, plus or minus the difference in winnings at the end. In Macau, the junket acts as a bank, extending the gambler credit, and settling the debt in cash at the end of the trip.
Macau’s casinos typically pay stiff commissions to junket companies for bringing customers to the island, and gamblers pay fees to junkets for arranging their travel (and helping them avoid bank transactions).
The casino/junket market is huge: $17 billion (£12.8 billion) is staked each month through the single largest junket, SinCity Group, according to Bloomberg. Macau’s gambling economy dwarfs that of Las Vegas, because it is accompanied by a large shadow financing sector operated in part by the junkets.
The Dragon Corp ICO essentially solves all that friction. Gamblers will buy Dragon crypto-coins and then exchange those for non-negotiable chips, Ahmad says. Dragon coins — which will be in limited supply — thus have two sources of demand: Gamblers who buy them to wager in the floating casino, and ICO investors who are buying the coins because they think it will go up in price like Bitcoin or Ethereum.
Dragon is also going to charge a fraction of the costs that traditional junkets add. Typical junket fees are 5% each way. “We charge 0.5% [each way], taking only 1%. It’s much quicker, cheaper, faster, more transparent,” Ahmad says. “You have full ownership of the tokens. It’s better in all aspects.”
The floating aspect of the casino is not simply for gimmick purposes, it allows for adaptability and being able to move the location to various spots if needed.
Despite the various troubles, if the company can make certain to stay out of legal troubles then they have a solid shot, who wouldn’t want to say that they’ve been to a floating casino?
See images here