Junket agent Chan Koon-wah was the biggest winner in the Waldo Hotel casino's surprise success in the VIP gambling market last year.

Operator Galaxy Casino paid Chan and fellow agents William Lee and Cheng Kwee HK$1.17 billion in commissions and payments in kind out of the Waldo's HK$3 billion in gambling revenue, according to the circular sent to shareholders voting on K Wah Construction Materials' HK$18.4 billion buyout of Galaxy. The circular said Chan was paid the most.

Contracts signed a week after the Waldo's opening and made publicly available in connection with the deal assigned Cheng and Chan interests in 16 VIP tables each. The casino has 43 VIP and 20 public tables.

Supplementary agreements signed at year-end but only covering a few of those tables state that Galaxy is to pay commissions to the three agents at 0.7 percent of the amount of VIP chips their clients purchase or receive in exchange for winning bets. The later agreements say Galaxy will pay the agents 30 percent of the gross profits after expenses generated from their tables; earlier agreements list a 40.25 percent profit share for some tables.

The circular says the agents are contractually prohibited from working with other casino operators. Galaxy, it states, is not providing credit to gamblers but the agents are.

Cheng is also profiting handsomely as co-owner with Yeung Chi-hang of the Waldo through their firm Wealth Access Holdings. The company owns a 2.1 percent stake in Galaxy excluded from the K Wah buyout. It and Hugo Legend, a company owned until recently by Galaxy director Pedro Ho, shared HK$367.5 million for steering gamblers to the Waldo. Galaxy kept just HK$123.8 million of the Waldo's profits after paying the middlemen.

The circular indicates that the owners of two hotels which are to open with Galaxy-operated casinos early next year will be well compensated, too.

Lui Keung-kwong and Siu Tak-kung, owners of the Rio Hotel, will skim half of net gaming wins at Galaxy's casino in the hotel for shepherding gamblers, providing consulting help and covering operating costs.

Hugo Legend, now owned by Suen Suk-hing and a company 90 percent owned by Wealth Access and 10 percent owned by Galaxy, will be paid half of net profits at the casino at the Grand Waldo Hotel for similar help.

The circular details connected transactions involving Galaxy directors Francis and Lawrence Lui, sons of K Wah Group chairman Lui Che-woo. Two companies controlled by Lawrence received HK$37.8 million from Galaxy over the past three years for ``professional, technical and administrative support'' but the arrangement was terminated this year. Francis received HK$6.8 million from Galaxy for guaranteeing a HK$272 million loan to the company from Hang Seng Bank.

The circular says Galaxy paid Fan Siu-pang, its former chairman and a director until recently, HK$55 million in 2002 for consulting help on the company's planned Cotai resort. zach.coleman@singtaonewscorp.com