Apr 09, 2016 Dozens of sailors have been stranded on a casino ship in Hong Kong harbor for six months. Near Kai Tak Cruise Terminal. But ships calling in Hong Kong cannot be. In May 2015, Genting Hong Kong purchased 100% ownership of Crystal Cruises and plans for expansion into river cruising, private jet charters using Boeing 777 aircraft and the new build of three 100,000 GRT mega cruise ships was announced for the brand. Genting were also announced to build a 204,000 GT ultra luxury and giant cruise ship.
Friday, April 15th, 2016 | Written by April BergmanA financial and legal standoff is taking place in Victoria Harbour in Hong Kong. The standoff is testament to the effects of Xi Jinping’s corruption crackdown on the Chinese gambling industry. The standoff involves a casino cruise liner named the New Imperial Star.
Chinese officials impounded the ship, due to “serious deficiencies” in the ship’s maintenance. Meanwhile, the crew remain aboard the ship, refusing to leave until they are paid 6 months of unpaid salaries. The amount owed the crew of 46 is $400,000.
Rationing the Ship’s Supplies
Supplies are running out on the ship, but the 62-year old captain of the New Imperial Star, Valerie Lyzhyn, said he anticipates movement two weeks from now, when the next phase in legal proceedings begins. Until then, the crew is doing the best they can with rationing.
Captain Lyzhyn told Reuters, “There’s one egg per crew member per day,” he said, stating that breakfast is particularly miserable for the crew, then added, “No sausages, no bacon, no milk, nothing.”
Hong Kong’s Casino Cruise Industry
The ship is moored a barge-ride away from the port in eastern Hong Kong, which is bustling with activity. A year ago, Hong Kong was home to 12 casino cruises. Business was booming, much like it once was in Macau. President Xi Jinping’s crackdown on financial corruption caused business to collapse.
The New Imperial Star would navigate to the Tsim Sha Tsui pier in Hong Kong’s Kowloon district at 8:00 pm in the evening and pick up hundreds of passengers. Like the casino cruise industries in the United States and Australia, the ships would sail into international waters. These, Chinese and Hong Kong gaming laws were not in effect, so the gamblers could make bets legally.
But that was a year ago. The captain said to the western reporters, “Really, business has gone down. One year ago we had 200 passengers. Before we stopped operating, we had only 50.”
Impounded in Victoria Harbour
Last October, the Marine Department impounded the ship, because the owners stopped paying maintenance fees. That’s when Hong Kong officials declared the ship to have deficiences and put an end to their cruises.
Since then, the crew of the New Imperial Star has lived on the ship in Victoria Harbour, a fancy 460 foot casino cruiser complete with chandeliers, gaming machines, and gaming tables. The ship easily accommodates the 20 Ukrainians, 18 Burmese, and 8 Chinese crewmen, who refuse to leave the ship until they are paid.
How the Crew Will Be Paid
Hope is around the corner. Captain Lyzhyn hopes and expects the Chinese authorities to impound the ship in two weeks’ time. If so, then a legal process will begin to find the owners of the New Imperial Star and force its owners to pay their crew. That process might take a few months.
Captain Lyzhyn told Reuters he was uncertain who the ultimate owner of the New Imperial Star is. He knows the name of the management company, Sky Wheel Limited, but calls to Sky Wheel’s number went unanswered. The previous management company, Sea Hawk Asia, answered its phones, but declined to answers questions about the New Imperial Star’s situation.
Ties to the Macau Junket Industry
People who know Hong Kong’s casino cruise industry say most of the ships are owned by junket operators out of Macau. The junkets have complicated ownership arrangements, often with a number of investors. Business is complex for a reason: many believe the junket operators are backed by money from organized crime.
Mainland China’s courts do not enforce payment of gambling debts. For that reason, Macau’s casinos could not institute the “markers” system (credit) which is used in Las Vegas. The casino operators wanted to offer credit to Chinese high rollers, but could not trust to have the money repaid.
To compensate, junket operators would arrange VIP trips to Macau. These operators would offer credit to the high rollers. To force repayment, the operators needed the help of organized crime units known as triads. These people could harrass and intimidate VIPs into repaying, despite being unable to go to court.
Xi Jinping’s Corruption Crackdown
When President Xi Jinping began his corruption crackdown across China, he first targeted major power brokers like Communist Party officials and wealthy businessmen. These two classes of citizens made up the so-called high rollers of Macau, so the money trail eventually led to China’s gambling destination. When the investigators began to probe the junkets, they found a web of corruption.
Hong Kong Cruise Ships
The junket system no longer works. The junket operators appear like they were willing to cut losses on the casino cruises, simply to be rid of the headache. But 460-foot cruise ships are valuable, so legal proceedings should eventually lead to payment for Captain Lyzhyn and his crew, if they are patient.