So how does a country like China, which strictly limits currency exports, fuel a gambling boom that has seen its tiny territory of Macau emerge in less than a decade as the largest casino market in the world by far, in revenue terms the size of seven Las Vegas Strips? It’s a question that has intrigued law enforcement agencies in the West for years, particularly those affiliated with the government of the United States, where Chinese money has been rolling into Las Vegas’ private baccarat salons by the train load.

Baccarat, the game of choice for China’s high rollers, first overtook blackjack as the highest-grossing table game on the Strip in 2009, and it has grown to the point where it now accounts for more than 40 percent of total Strip table win—43 percent last year at the 17 largest casinos by gaming revenue—good for $1.58 billion in 2013. Given that the game comprises on average all of 9 percent of total table inventory, it’s clear that some really big bets are being laid down. 

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) wants to know where they’re coming from, and the implications of that are sending shudders through the industry.
“This is a serious issue that could radically alter the way that casinos do business,” as Geoff Freeman, president of the American Gaming Association, the industry’s national lobbying arm, put it recently.
Analysts attribute the game’s sudden impact to the success of the three Nevada licensees—Las Vegas Sands, MGM Resorts International and Wynn Resorts—whose Macau subsidiaries now generate a sizable portion of their corporate profits. 
But it hasn’t come without a price. Las Vegas Sands, which last year derived 70 percent of its gaming revenue and 61 percent of its EBITDA from its Sands China subsidiary—90.6 percent and 90 percent, respectively, counting the company’s Singapore resort—has been under investigation by the U.S. Justice Department and the U.S. Securities and Exchange Commission since 2011 in part in connection with its dealings in Macau. Last August, the company agreed to forfeit $47.4 million to the Justice Department to avoid criminal charges tied to cash transactions its Venetian/Palazzo resort complex on the Strip handled on behalf of one Zhenli Ye Gon, a high-rolling Chinese-Mexican businessman linked to international drug trafficking. 
In October, Caesars Entertainment, the largest operator in the U.S. by number of properties, reported that its Strip flagship, Caesars Palace, was being investigated by FinCEN for possible money-laundering violations.
Sands says it no longer allows customers to transfer funds internationally and limits the use of checks or money transfers from business accounts. It also restricts the amount of cash customers can withdraw from their casino accounts in a given day. And it has bulked up on former FBI agents, regulators and attorneys experienced in anti-money laundering law to help it monitor high-roller activity. 
FinCEN, however, wants more and is reported to be crafting rules that will require casinos to vet the sources of their high roller funds along the lines of the strict anti-money laundering requirements financial institutions must adhere to under the U.S. Bank Secrecy Act. Given that current law requires only that casinos report so-called suspicious transactions, this would indeed be radical, as Freeman suggests. Wealthy gamblers, every casino’s best-kept secret, will certainly resent the intrusion, and operators fear, not without justification, the whales will take their chips elsewhere—to places like Macau, where they can be assured there’ll be no questions asked.
Chinese law says its citizens aren’t allowed to take more than the equivalent of US$50,000 per year out of the country. Chinese companies can exchange yuan for foreign currencies, but only for approved business purposes, such as paying for imports or approved foreign investments.
The reality is something else entirely. Macau’s casinos raked in $45 billion last year, most of it from mainland Chinese gamblers. Through the first three months of 2014, gaming revenue was tracking just shy of $1 billion a week.
Data analyzed by The Wall Street Journal in 2012 suggested that in the 12 months through September of that year, about $225 billion flowed out of China, equal to about 3 percent of the nation’s economic output. 
The U.S.-China Economic Security Review Commission claims more than $200 billion is laundered through Macau every year, and while it “did not seek nor did it find evidence of wrongdoing by any U.S.-based casino company, either in Macau or in Las Vegas,” given the potential for terrorist financing from such massive leakage, the commission concluded in its annual report to Congress last fall “that the underlying questions about the integrity of operations in Macau bear further scrutiny by Congress. As part of this review, Congress should examine whether federal oversight and, potentially, regulation of the overseas activities of domestically licensed gaming enterprises is merited.”
VIP gambling is the locus of these concerns, a secretive world built on sprawling, more or less loosely organized junket syndicates comprised of thousands of agents and sub-agents who provide the high rollers, most of them from the mainland, who account for two-thirds of those casino billons. 
They operate the private rooms where it’s made, and they provide the credit that fuels it, which is how they circumvent Beijing’s currency limits, and as gambling debts are not legally enforceable in China, they perform the additional, and critical, function of collecting on the loans.
Last month’s conviction in a Hong Kong court of businessman and junket investor Carson Yeung for money laundering has shined a light on their activities, but it was with an eye on FinCEN—the Macau government having evinced little interest in the sector—that Sands China was reported recently to be stepping up scrutiny of its junket partners, a policy that could reduce the number of junkets willing to work with the company. 
The AGA, in the meantime, has put together a set of Bank Secrecy Act “best practices” which they’ve discussed with Treasury officials, and they’ve formed a task force composed of casino members and staff to try to head off the worst of what FinCEN’s new rules might contain.
“The AGA is dedicated to strengthening the gaming industry’s relationship with FinCEN and supporting their critical goal of protecting the United States,” Freeman said. “With our industry partners, we are also helping FinCEN to better understand the nuances of the gaming business and our commitment to compliance.”