Legal woes continue to be a thorn in the side of American gaming companies. Wynn Resorts (Nasdaq: WYNN) is dealing with a lawsuit and forced buyout of one of its largest investors, which includes accusations of wrongdoing in a $135 million donation to the University of Macau Development Foundation by the company. Late last week the lawsuit between Las Vegas Sands (NYSE: LVS) and Steve Jacobs got a little more interesting when Jacobs accused Sheldon Adelson of personally approving a prostitution strategy to drum up business.

Bribery and deals of questionable legality are nothing new in Macau. Stanley Ho, who used to have a monopoly on gambling there, was often tied to organized crime. His ties even forced MGM Resorts (NYSE: MGM) to divest from its Atlantic City operations because the gaming board was uncomfortable with Macau partner Pansy Ho's father. Bribery and other questionable business arrangements are common in Asia and often seen as a part of doing business by American companies.

Jacobs, former head of Macau operations for Las Vegas Sands, is trying to uncover documents he says he kept in a folder labeled "Outrageous," according to The Wall Street Journal, documents that highlight the prostitution strategy, deals with organized crime members, and hiring of illegal construction workers, among other things. At the very least, we know that prostitution was reported on a widespread level at The Venetian Macau because 100 suspected prostitutes were arrested while Adelson was visiting in 2010.

What it means for you
The mudslinging between Adelson and Jacobs has been going on for two years and with the SEC and Department of Justice involved it will be at the very least a nuisance for the company going forward. That will place a cloud over Las Vegas Sands, but I see it as highly unlikely the company will be meaningfully affected by any lawsuits.

Macau has had all kinds of questionable practices and both family and political connections play a much larger role than they would in a more open market. Just look at gaming companies: Melco Crown's (Nasdaq: MPEL) CEO is the son of Stanley Ho, MGM partnered with his daughter to get its license, Las Vegas Sands had to pay $42.5 million to three men who said they were owed money for helping the company get a casino license, and Wynn Resorts had a head-scratching land deal with an unknown person in Macau for its lot on Cotai.

It's a tangled web in Cotai and right now Las Vegas Sands is at the center of the mess. It isn't a reason to sell right now, but it will be worth keeping a close eye on.

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Fool contributor Travis Hoium manages an account that owns shares of Melco Crown and Wynn Resorts. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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