Most people still think the United States gambling industry is anchored in Las Vegas, with its booming Strip and 24/7 action, a place where years of alluring marketing campaigns have helped scrub away the taint of past corruption.
Yet in just a decade, the centre of gambling has migrated to the other side of the world, settling in a tiny Chinese territory an hour's ferry ride from Hong Kong. The gambling mecca of Macau now handles more wagers than all US-based commercial casinos put together, and many of those bets end up swelling the balance sheets of US corporations.
But as US gambling firms have remade Macau, Macau has also remade them. Chasing riches, these companies have been hit with allegations of improper conduct. Could these corruption claims revive the spectre of gambling's bad old days, when Sin City casinos kept mobsters flush?
"There are some countries where you either have to pay to play and break the law, or you have to not do business there," says Indiana-based casino consultant Steve Norton. "I think the jury's still out on Macau."
A few hours' flight from half the world's population, Macau is the only place in China where gambling is legal. Each month, 2.5 million tourists flood the glitzy boomtown to try their luck in neon-drenched casinos. Most are nouveau-riche Chinese who sip tea and chain-smoke as they play.
The former Portuguese colony has long been known for its gambling but used to offer a seedier experience, with small-time gambling dens crowding up against textile factories and gangs, prostitutes and money-launderers operating openly in the cobblestone streets. That was the scene in 1999 when China took over Macau and opened it to outside gambling operators.
"It was a swamp," says Sheldon Adelson, chief executive of Las Vegas Sands. "Everybody thought that I was crazy."
Nevertheless, he and the two American competitors that tried their luck there succeeded spectacularly. Adelson's first Macau casino opening caused a stampede that ripped doors off their hinges. Now operating four booming casinos in Macau, he makes far more money in China than in Las Vegas.
"This industry is supply-driven, like the movie Field of Dreams: build it and they will come," he says. "I believe that."
But consider where Adelson said that: on the witness stand in a Las Vegas courtroom, defending his company against one of his former Macau consultants.
In May a jury found against him, awarding the consultant US$70 million ($89.19 million) for helping Sands secure a lucrative gambling licence in Macau. Sands immediately appealed.
But the lawsuit may be the least of Adelson's worries. His firm is also accused of making improper payments to a Macau lawmaker and collaborating with the Chinese mafia. The US Department of Justice and Securities and Exchange Commission are investigating. Sands denies wrongdoing.
It's not just Sands facing legal and regulatory troubles linked to Macau. Two of the other three major US gambling firms are, too: Wynn Resorts and MGM Resorts International.
Wynn is being investigated over a US$135 million donation in 2011 to the University of Macau Development Foundation. Wynn co-founder Kazuo Okada called the donation "suspicious" in a 2012 letter to the SEC. He noted the foundation's lead trustee is also a member of the Macau Government, and said the donation coincided with Wynn's bid for land for a third casino.
Okada is himself under Department of Justice investigation for possible bribery in the Philippines, which he denies, and has fallen out with his former Wynn colleagues.
The Wynn payment, if indeed made to smooth the casino's path, could violate the Foreign Corrupt Practices Act, or FCPA, which bars US companies from paying off officials to win business overseas. Wynn says it acted properly and had no need to buy off authorities. Nevada regulators have found no wrongdoing.
MGM got into trouble with New Jersey regulators when it opened a Macau casino with Pansy Ho, the daughter of a gambling kingpin allegedly linked to Chinese gangs. The state found the partnership "unsuitable" and forced MGM to sell its stake in an Atlantic City casino. MGM denied there was anything inappropriate about the relationship, began the process of selling its stake and did not cut ties with Macau.
Two years later, MGM chief executive Jim Murren stands by that choice. "The Macau market is now larger than the entire US gaming market. Unfortunately for Atlantic City, it's gone the other way. It's smaller now than when we entered it. The fortunes of the two couldn't be more different."
The Sands inquiries stem from a pending wrongful termination case brought by former Sands executive Steve Jacobs in 2010. Jacobs claims Sands' China subsidiary did business with known gangsters, tacitly condoned prostitution and made inappropriate payments to a lawyer who was also a Macau lawmaker. Sands has denied all claims but recently said an internal audit had found possible breaches of a section of the FCPA.
Sands opened for business in Macau in 2004, at the beginning of a boom in China's economy that has lifted incomes for hundreds of millions of people, allowing them to afford pleasures such as casino gambling. Today the former backwater is in the midst of one of the greatest gambling booms the world has ever known. To rival the money it takes in, Las Vegas would have to attract six times as many gamblers each year as it does now - essentially, every adult in America. Wynn Resorts now makes nearly three-quarters of its revenue in Macau. Sands, which owns the Venetian and Palazzo, earns two-thirds of its revenue there.
But like early Las Vegas, Macau has a long history of ties to crime syndicates - in this case secretive triads that first formed on the mainland more than a century ago. Shootouts, bombings and even assassinations of officials were common during magnate Stanley Ho's four-decade monopoly of gambling. (He is Pansy Ho's father.) In the late 1990s, a police official tried to reassure visitors by remarking that Macau had "professional killers who don't miss their targets".
It is still tricky for modern casinos to avoid gangs, illegal money transfers and at least the appearance of bribery.
"There's no way you can do business over there without having allegations made against you. Most of them are untrue," says Bill Weidner, who was president of Sands until 2009.
One contributing factor is China's capital controls, which restrict the amount of money that citizens take out of the country, including to Macau, which like Hong Kong is a semi-autonomous region with its own financial system. Another is the lack of reliable credit-risk information in China, which makes it hard for casinos to figure out whom they should lend to.
So-called junket agents provide an easy fix. They identify wealthy would-be VIP gamblers, whisk them to Macau's tables, lend them money, then settle up when they get home.
Junket operators often assume management of a casino's private VIP room. Casinos provide the facilities, dealers and chips in return for a cut of the profits. Baccarat played in VIP rooms accounts for two-thirds of Macau's US$38 billion ($48 billion) in annual gambling revenue.
While many of the more than 200 junket operators active in Macau are law-abiding, some have recorded ties to organised crime. Operating off the books, junkets pay out winnings in Hong Kong dollars, widely accepted in Macau, which players can then move to another location. As a result, Macau is seen as a conduit for money flowing out of China, with wealthy individuals and corrupt officials suspected of transferring funds abroad.
The enclave has seen a spate of killings and kidnappings linked with debt collection, including a grisly case last year in which two men were stabbed to death in their hotel room.
Today US firms are tweaking their flagship Las Vegas casinos to look and operate more like Macau-style properties. The biggest casinos have imported Asian pop sensations, Chinese delicacies and baccarat, now Nevada's biggest moneymaker. They've outfitted their hallways in red, a lucky colour in Asian culture, and set up Macau-style VIP rooms that employ junket operators catering to high-rollers.
Asian visitors now account for 9 per cent of tourists to Las Vegas, up from 2 per cent in 2008. And the Strip is preparing to welcome its first Asian-owned casino: a multi-billion dollar Chinese-themed extravaganza called Resorts World, complete with pandas and pagodas.
One reason casino bosses want to lure Macau customers to Las Vegas is that Nevada tax on winnings is only a fifth of the 39 per cent charged by China.
But some of the problems linked with Chinese gambling halls may be moving to the Strip too. In March a man police described as an enforcer for the Taiwan-based triad United Bamboo began serving a life term for stabbing a man to death in a karaoke bar near the Strip. Prosecutors said he'd been sent to collect a US$10,000 gambling debt.
Last year the US Treasury's Financial Crimes Enforcement Network warned casinos to monitor junket operators and report suspicious activity.
Unlike some other states, Nevada allows junket operators to work in casinos without the full suitability checks required for key employees. Still, regulators are not blind to the link between junkets and triads.
Nevada Gaming Control Board chairman A.G. Burnett told a congressional advisory panel last month it was "common knowledge that the operation of VIP rooms in Macau casinos had long been dominated by Asian organised crime".
Steve Vickers, who commanded the Royal Hong Kong Police criminal intelligence bureau, believes nearly all junkets that cater to Chinese tourists collaborate with organised crime.
"You won't find the triad names listed ... but they are behind it, because who is it that can reach into China and enforce the debts, move the money? Only one kind of person can do that."
In the 1980s, state regulations and an FBI crackdown helped push out the mob bosses who had taken refuge in the gambling world and usher in the industry's modern corporate era. Today, states can impose fines or revoke licences if any US firms are found to have acted improperly in Macau. But except for rare instances, regulators have so far refrained from public action.
Conventional wisdom is that no US companies will lose their licences over the allegations, even if proven true. At worst, they could get fined, says Michael Paladino, an analyst at the credit rating agency Fitch. "They can handle that," he says, noting that the largest FCPA fine to date, imposed on German engineering giant Siemens, amounted to about US$1 billion. That's less than a month's revenue for Sands.
The balance of power between casinos and regulators has shifted as gambling companies have achieved their own version of outsourcing, according to I. Nelson Rose, a professor at Whittier Law School in California who writes a blog called Gambling and the Law. "Macau forced the casinos to see that they could become like other large US corporations: set up their plants and operations in other nations and make far more than they can being stuck just in Las Vegas."
In any case, public officials aren't exactly clamouring for investigations. Among the ranks of the unconcerned is former Las Vegas mayor Oscar Goodman, a one-time lawyer for mob figures. Goodman says he doesn't worry about Macau because Americans are not paying attention to the murky allegations there.
"You ask people who Sheldon Adelson is, if 10 out of 50 recognise the name, I'd be surprised. If they associated him with the Venetian and the Palazzo, I'd be even more surprised. People are busy."
While Wynn, MGM and Sands have taken off, Caesars, the industry's fourth major player, has been left behind. Caesars did not apply for the finite number of gambling licences in Macau in the early 2000s for fear of upsetting domestic regulators.
At that time, says Phil Satre, former chief executive of Harrah's Entertainment - today Caesars Entertainment - he didn't think American regulators would tolerate any hint of ties to criminal activity in Asia. "When I look back ... I'd probably take a different posture."