Dragon Corp wants to raise $500m in ICO for floating Macau casino

Dragon Corp, a private investment company, is looking to raise $500m through an Initial Coin Offering (ICO) which should bankroll a new and ambitious project aiming to build a floating casino docked in Macau and launch it to investors and the public. The move is ambitious for several reasons, not least the amount sought from potential investors, and similarly, the fact that Macau has some of the world’s toughest gambling laws.

Yet, the investment company feels good about its chances despite the ICO attended by a convicted criminal. Dragon Corp won’t seek to raise the funds in China, though, as ICOs are a prohibitive form of funding in the country. Another part of the arrangement that Dragon Corp outlines is that players are only buying chips that can be redeemed in physical form at the casino and used on the premises exclusively. This makes sense when you consider the hoops Chinese high rollers have to jump through to actually play.

This means that players will not get equity in the project, per se, just buy gambling credit in advance, assuming the project is realized and does not hit a funding or regulatory wall. Macau, Singapore, and the South Korean Island of Jeju habitually attract Asian high-rollers and Chinese customers.

To avoid butting heads with Chinese authorities, Dragon Corp. is registered in the British Virgin Islands, giving it some leeway. As to entering Macau as a new casino operator, it’s not immediately clear how the necessary clearances would be obtained. In the meantime, another issue could arise because Wan Kuok-koi, better known as “Broken Tooth,” an infamous gangster, showed up to the company's ICO in person.

China takes a dim view of such displays and has been actively cracking down on gambling syndicates, a network of which Broken Tooth has been a part himself. Yet, in an interview for Business Insider, Dragon Corp CEO Casino Lisboa in Macau, known as Chris, has given assurances that Broken Tooth is in no way involved with the project.

However, he is no stranger to the people at Dragon Corp. either. “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,” Chris emphasized.

The project does sound appealing on paper, too, as it would save high rollers the pain of having to move their money through junkets at least for a while. The downside is that players are paying upfront, and the people who usually bet high amounts at casino tables for fun are not the most patient lot.

The Dragon Corp. casino also avoids some of the issues that arise from the junket model, whereby players ought to leave their money in a sort of escrow environment back in China while traveling with the junket to a casino in Macau and paying the junket an additional fee for covering associated transfers and travel costs. Yet, the ICO casino may change this at least for a while, with the possibility of a secondary market.

However, China is up to date with such initiatives, and it would not be surprising to see a sterner response from authorities who could see the project as a clever rule-bending that merits further examination. If this happens, even a loose association with Broken Tooth could give authorities the legal precedent to come down hard on the venture or bog it in Kafkaesque regulatory procedure.

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