MANILA, Philippines - The owner of Wynn Macau casino accused Japanese gambling tycoon Kazuo Okada on Tuesday of paying off Filipino casino regulators in his bid to build a rival gaming resort in Manila.
Steve Wynn, 70, accused Okada, 69, of making improper payments and gifts totaling about $110,000 to Filipino casino regulators, as the latter’s Universal Entertainment Corp. broke ground at the 12-hectare Philippine Amusement and Gaming Corp. (Pagcor) Entertainment City in Manila Bay on Jan. 26.
Entertainment City is dubbed as Manila’s equivalent of the Las Vegas strip.
Okada said it was aiming to attract the same VIP Chinese gamblers Wynn has targeted at his five-year-old Macau casino.
He promised more than 2,000 guest rooms in three hotels, with the planned opening in the first half of 2014.
Las Vegas-based Wynn Resorts said in a lawsuit that Okada, Japan’s pachinko king and a director of Wynn, went behind the company’s back to build a stake in Asian gaming for his own Universal Entertainment group.
Wynn also accused Okada of spending more than $110,000 to curry favor with Philippine officials in apparent violation of the US Foreign Corrupt Practices Act, jeopardizing Wynn’s own reputation in the process.
The suit, filed Tuesday in Las Vegas district court, said that Okada had sought a gaming license in the Philippines and made the payments despite Wynn’s telling him not to do so.
“Mr. Okada, his associates and companies appear to have engaged in a longstanding practice of making payments and gifts to his two chief gaming regulators at Pagcor,” the lawsuit said.
It named former Pagcor chairman Efraim Genuino and current chairman Cristino Naguiat, and their respective families, as the main recipients of the payoffs and gifts.
Okada paid for Genuino’s trip to the 2008 Beijing Olympics, Wynn said.
“Okada’s conduct poses a direct assault upon, and a threat to, Wynn Resorts’ reputation for probity, which is central to maintaining its stature in the gaming industry as well as its current and future licensing,” it added.
The suit was a strong blast against a potentially powerful competitor to Wynn in the high-stakes battle for the lucrative Asian gambling market.
Okada owns a 19.7 percent stake in Wynn Resorts.
The suit also accused Okada of paying for trips of South Korean officials to Wynn properties to boost his effort to build a gambling resort at the Incheon Free Economic Zone.
The suit came after the Wynn board voted Sunday to expel Okada and to redeem his 24 million shares in Wynn, held through Aruze USA Inc., a Universal subsidiary.
The board said it would redeem the shares at a 30 percent discount to the market price, issuing a 10-year, $1.9-billion promissory note for them.
Wynn filed the lawsuit after conducting a lengthy internal investigation led by former US Federal Bureau of Investigation chief Robert Freeh, hired to conduct the probe.
Wynn said the probe found that Okada had used Wynn’s name to advance his own interests in the Philippines.
It also said the Okada insisted that it was “customary” to give gifts to officials in Asia via intermediaries.
Wynn cited 36 separate instances “where Okada or his associates/affiliates made payments exceeding $110,000 that directly benefited senior Pagcor officials.”
The investigation report attached to the suit cited mostly free stays and dinners at Wynn resorts in Las Vegas and Macau for the officials, their families, and the husband of former President Gloria Macapagal-Arroyo.
Okada will take legal action
In a Feb. 15 interview with Freeh’s investigation, however, Okada denied knowledge of much of the money spent on the officials, and said that Naguiat’s 2010 stay in the Wynn Macao resort was to allow him “to better understand the casino business.”
In a statement Sunday, Universal branded the board’s action “outrageous,” saying the investigation had been “rushed.”
“We have not even been provided with the opportunity to review the Freeh report,” it said.
“Universal Entertainment will take all legal actions necessary to protect its investment and prevent a forced redemption of its shares.”
Universal, through Aruze USA, was one of four winners of provisional gaming licenses awarded by Arroyo’s government in 2008.
Palace standing by Naguiat
Malacañang yesterday defended Naguiat on accusations he received perks and privileges from Okada, insisting he never received cash gifts.
“Insofar as chairman Naguiat is concerned, there was no cash gift granted,” presidential spokesman Edwin Lacierda said in a briefing, noting that only hotel accommodations had been granted to the Pagcor chief.
He reiterated that offers like what Okada made are commonplace in the gaming industry, describing them as “industry practice.”
He said such practices are allowed and pose no problem with President Aquino since it would cut the cost of the government, especially because attending international conventions in New York, Japan or London would definitely be expensive.
“We (who are) outside of the gaming industry would view this as some sort of unique but again, this is something that’s common in the gaming industry,” Lacierda stressed.
He also confirmed that there were negotiations for a meeting between Aquino and Wynn.
“Most likely, if business people would come over, it would be to express to the President their investment commitments. That’s normally when business people would come, pay a courtesy call and to inform the President this is what we intend to do,” he said, adding that the meeting never pushed through.
Genuino: What perks? Meanwhile, Genuino’s lawyer Ramon Esguerra denied that his client received perks and privileges from Okada in 2008 until the latter part of the Arroyo administration.
“Look at the dates. He has not gone out of the country since 2008. The travel documents of the Bureau of Immigration (BI) will bear him out. There is nothing wrong. I don’t know if that has reference even to the buying of the Chanel bag or whatever,” Esguerra said, referring to an expensive bag supposedly given as a gift.
He said the alleged gifts were nothing, and that some perks could be part of the reciprocal arrangements, echoing the statement of Malacañang on the issue.
- Christina Mendez