In a development that wouldn't be out of place in Hollywood heist movie "Ocean's Eleven," a company that operates the high stakes rooms at Wynn Macau reported earlier this month it had been the victim of a multimillion dollar scam.
The company was a junket operator, which play the middleman between casinos and their big spending gamblers.
They vet and invite high rollers to play the VIP rooms at casinos and also lend players money -- allowing them to circumvent restrictions on how much cash can be brought outside mainland China.
Local police handling the investigation estimated the missing money to be at least 270 million Macau patacas (about $34 million) but declined to give further details.
Feeding the scandal, the aggrieved company, Dore Holdings, took out an advertisement in a local newspaper naming and accusing a former employee of embezzlement.
Wynn Macau, run by Las Vegas casino magnate Steven Wynn, issued a statement
saying they did not lose any money but it's the latest unsavory incident to surface in the world's largest casino hub -- following the bust of a prostitution ring and roundup of 4,000 alleged triad members earlier this year.
The multimillion dollar swindle comes at an especially bad time for the Macau government as it tries to reposition itself as a wholesome and family friendly tourist destination.
The city, the only Chinese territory where casinos are permitted, has been grappling with a long losing streak, with China's anti-corruption campaign deterring high-stakes gamblers.
While revenues are still seven times those of Las Vegas, they've dropped for 16 months straight.
Shadowy but 'necessary' middlemen
Some industry insiders think the Dore fraud could be much higher. Jamie Soo, a gaming industry analyst at Daiwa Capital Markets, estimated
it could be as high as HK$2 billion or $238 million.
In its aftermath, Macau's gambling regulator said it would encourage transparency by enforcing stricter regulations requiring junkets to reveal their shareholders' identities.
It also warned of the illegality of junket operators acting as unauthorized financial institutions -- that is investors should not be lending money to the junkets for them to re-lend to gamblers.
Casino junkets may be a shadowy world but Grant Govertsen, an analyst at Union Gaming, says they are a "100% absolute necessity" for conducting business with mainland Chinese customers.
"There are two reasons for this. Number one is the sourcing of customers," Govertsen told CNN.
"The junkets have the municipal-level intelligence and they are operating in mainland China. They know who is, for a lack of a better phrase, a good credit or not. There is no system in China like you would have like in the U.S., where the casinos can run a credit profile of anybody.
"Number two, gambling debt is not recognized a legal debt in China... Wynn could give you credit. If the (debtor) says 'screw you,' there's not much you can do other than not invite him back. Hence, the junkets are also debt collectors."
It is not the first time vast amounts of money have gone missing. Last April, a former staff member of another Macau junket reportedly absconded with $1.3 billion
, sending shockwaves through the casino industry.
The year began with a high profile bust of a prostitution ring, run by a member of the city's most powerful family.
Alan Ho, a nephew of casino tycoon Stanley Ho, was arrested at Hotel Lisboa in a sting operation for running a syndicate that involved over two thousand women, local media reported
. Ho remains in detention while the investigation continues. The Macau prosecutor's office declined to comment.
Just a few months earlier, his cousin Pansy Ho, head of MGM China, spoke to international media about her grand plans to create attractions in Macau that specifically are not gambling-related.
The photos of his arrest also couldn't be more different to the family-friendly image that his other cousin, Lawrence Ho, CEO of Melco Crown Entertainment, is pursuing with his new resort, Studio City. Launching at the end of October, it promises Warner Brothers-themed fun zones and Ferris wheel rides.
All this is playing out amidst heightened global competition for gamblers.
Established casino hubs like Singapore and Las Vegas pose alternatives for mainland Chinese gamblers while newer casinos in Vietnam, Cambodia, and potentially Japan
, are luring away Macau's bread and butter.
The twin effects of the anti-corruption campaign and mainland Chinese traveling further abroad has led to a sharp downturn
at the casinos.
Earlier hopes that two new casino resort openings
this year -- a Galaxy resort in May and Studio City opening next month -- would help industry revenues recover in the second half of the year have been dashed. A Bloomberg analyst survey expects the sector to drop 32%.
Aaron Fischer, CLSA head of gaming research, sees the recent incidents as mild setbacks and as a sign that Macau is committed to rooting out any hint of corruption.
"When you actually crack a prostitution ring or crackdown on junkets, that's always going to create a lot of headlines. Short term, it might be painful to see these unsavory things," he says.
The value of the VIP market, which was the most prone to money laundering, has halved, he says.
"A lot of the VIP segment that has gone away was somewhat from people who might have cheated the system in China. We're going to see a lot more non-gaming [attractions] added to the business mix. Macau is on the road to becoming a more reputable place in the next few years."