Okada last month accused Wynn Resorts Ltd of making an "inappropriate" $135 million donation to the University of Macau, based in the former Portuguese colony that is now the world's largest gambling destination.

Earlier this week the Las Vegas-based casino company responded with its own accusations, flagging some $110,000 in hotel rooms and other expenses that Okada allegedly provided to Asian gaming regulators through his Japan-based company Universal Entertainment Corp.

U.S. securities regulators are investigating Okada's accusations against Wynn Resorts, which has in turn said it plans to take its accusations to U.S. authorities.

Neither set of allegations provides a straightforward case for U.S. authorities to make, legal experts said.

The Foreign Corrupt Practices Act (FCPA) bars companies with U.S. links, such as a stock listing, from bribing officials of foreign governments in order to get or keep business.

But the donation by Wynn was to a university, not to a "foreign official" that the statute applies to. Wynn said the donation had been vetted by lawyers, and provided at a public ceremony, in which Okada participated.

The "transparency and openness" of the donation "run counter to any assumption that a bribe was being paid," said Palmina Fava, a partner at the law firm Paul Hastings who focuses on FCPA investigations and is not involved in the dispute.

Payments that raise suspicion under the law are often mislabeled on the company's books and do not include enough information to identify who is receiving the payment, Fava said.

Any case against Okada could also be a stretch, since the law generally applies to situations with a clear connection to the United States.

"For non-U.S. companies, they usually need to take an act while in the U.S. to subject themselves to U.S. jurisdiction," said Eli Richardson, a former federal prosecutor who now works in private practice at the law firm Bass, Berry & Sims.

The Justice Department has also in recent months suffered several setbacks in FCPA cases, which could dull any appetite to test its jurisdictional reach. Earlier this week, for example, it abandoned one of its biggest bribery cases in the military equipment business after it failed to convince two juries that what the executives did in the case was illegal.

LAWSUIT VS LAWSUIT

According to Wynn Resorts, the dispute with Okada stems in part from his push to develop new casino projects in the Philippines, which Wynn opposed out of concerns that they could steal Chinese clientele away from its Macau operations.

Months of tension between the long-time business partners burst into the open last month when Okada, who owned a 20 percent stake in Wynn Resorts, sued the company and said it had denied him access to its books.

In his lawsuit, Okada said he objected to a donation by Wynn to the University of Macau because the school sits on land owned by the government, and "there had been no discussion" whether the large gift was an "appropriate" use of corporate funds.

The donation is scheduled to be provided in annual installments through 2022, the same year Wynn Macau Ltd's gaming concession expires. Macau contributes about three quarters of Wynn Resorts' revenue.

In response to the lawsuit, Wynn said Okada was the sole dissenting vote against the donation from the company's 16-member board. He had objected to the length of time over which the donation would occur, not its propriety, Wynn said.

Following the lawsuit, the U.S. Securities and Exchange Commission notified Wynn that it had opened an informal inquiry into the donation. An SEC spokeswoman declined to comment on the status of the inquiry.

The SEC has brought at least one case in the past that involved a donation to a charity rather than a foreign official, but the director of the charity had a direct connection to the company's business in the country.

Schering-Plough Corp in 2004 paid a $500,000 civil penalty to resolve allegations that it violated the FCPA in making a donation to a Polish charity whose director also controlled a government health fund that influenced orders of pharmaceutical products.

Experts said Wynn's case against Okada is more substantive, since it includes more detail from a report by former FBI director Louis Freeh who led an investigation that began last October.

The "gross improprieties" Freeh found include expenses for hotel rooms and meals that amount to $110,000 over the course of three years, some which were allegedly inaccurately recorded in an attempt to disguise the recipient.

One transaction flagged in the report was a $50,000 hotel bill from September 2010 for the chairman of the Filipino government gaming commission, PAGCOR, to visit Wynn Macau with his family.

But other items highlighted in the report seem more benign. One, for example, is a $1,600 dinner for 15 people.

GIFT-GIVING CULTURE

The culture of gift-giving in Asia also muddies the case against Okada. For many companies and individuals in the region, what would be considered a bribe in the U.S. is no more than civil etiquette or nicety that is needed to secure trust and build relationships, according to legal advisors in Asia.

In China, at lunar new year, red packets or "lai see" containing cash are given. Red packets or similar monetary gifts are also given at weddings and other celebratory or auspicious events in many Asian countries including India and the Philippines.

If businesses or individuals are not sensitive to local customs and traditions when they are operating in developing countries, it can reflect badly on them and at times affect their operations and eventual profitability.

Timothy McNally, who heads Cambodian gaming firm NagaCorp and operates a compliance firm, saw a need for companies and governments in emerging markets to establish their own policies and codes of conduct, taking into account cultural practices.

He said he often sees cash gifts at special occasions.

"The bottom line is I am seeing an envelope passed and I can see cash inside and it makes me a little nervous because it is a different culture, different tradition," said McNally. "Does that mean there is anything sinister attached? There may or may not be."

The Philippines gaming regulator, Cristino Naguiat, said in response to the Wynn allegations that his office provides security and other benefits for casino executives when they visit the Philippines, and Okada simply returned the favor.

"We have this inter-casino courtesy and reciprocity (with) casino executives, we definitely take care of their transportation, security, we take them out for dinner," Naguiat said. "From the way I look at it, there was nothing wrong with our transactions with Mr. Okada."

Statements from the allegedly bribed officials in support of an alleged bribe giver could also prove useful to a defense, said Richardson, the former prosecutor.

The FCPA also has an explicit carveout for expenses that directly relate to promoting or demonstrating a company's products or services, something that Okada might argue applies in this case, lawyers said.

The SEC and the Justice Department have brought a few cases against companies for bribes around $100,000, but those involved companies whose shares traded in the U.S. and involved straight cash payments to officials.

Jacqueline Wolff, a former federal prosecutor who heads the white-collar defense group at the law firm Manatt, Phelps & Phillips said the use of the FCPA in the Wynn-Okada allegations was not surprising.

"There is a history of companies accusing competitors of violating all kinds of criminal laws and therefore getting an unfair business advantage," she said.

(Reporting by Aruna Viswanatha and Farah Master; Additional reporting by Erik dela Cruz; Editing by Tiffany Wu and Tim Dobbyn)

By Aruna Viswanatha and Farah Master