Casino Politics,Organized Crime
and the Post-Colonial State in Macau LO SHIU HING*
Organized crime and politics have been traditionally intertwined in Macau.During the colonial era,the Portuguese administration was characterized by bureaucratic corruption and a cozy relationship with casino capitalists.The colonial
state had limited autonomy vis-a
`-vis the casino capitalists.With the growth of tourism and the associated casino industry in Macau during the 1990s,organized crime groups penetrated various casinos and emerged as a baf?ing problem.Yet,neither the Portuguese administration nor the casino capitalists had the capability to contain the use of violence by organized crime groups.As Macau approached the end of the Portuguese colonial rule,the People’s Republic of China (PRC)decided to intervene in the rapidly deteriorating law and order.The Chinese intervention took the forms of stationing the People’s Liberation Army in the Macau Special Administrative Region (SAR),penalizing the triad boss Wan Kuok-kuoi,and supporting the new Edmund Ho Government’s attempts at civil service reforms.The SAR Government also liberalized the casino industry by embracing American investment.Due to market competition,the local casino capitalists have been forced to improve the management of casinos and to minimize the in?ltration of triads.Unlike the colonial state,the post-colonial state in the Macau SAR has enhanced its
relative autonomy vis-a
`-vis the local casino capitalists,directly or indirectly curbing the detrimental impact of organized crime.The case study of Macau is illustrative of the
critical role of state autonomy vis-a
`-vis casino capitalists,whose previous monopoly over casino management encountered the in?ltration of organized crime that grasped the opportunities for maximizing pro?ts in the era of the rapidly expanding casino industry.The Macau example also demonstrates the city-state’s use of market competition as a means to improve casino management and to contain the spread of organized crime at least in the short run.
*Sonny Shiu-hing Lo is Associate Professor,Department of Political Science at the University of Waterloo,Canada.He formerly taught at the University of East Asia (Macau),the Hong Kong University of Science and Technology and the University of Hong Kong.His books include Governing Hong Kong:Legitimacy,Communication and Political Decay (New York:Nova Science,2001),The Politics of Democratization in Hong Kong (London:Macmillan,1997)and Political Development in Macau (Hong Kong:The Chinese University Press,1995).He is now completing a book manuscript about organized crime in Greater China.The author thanks his research assistant Candy So for her support and help.
Journal of Contemporary China (2005),14(43),May,
207–224
ISSN 1067-0564print/1469-9400online/05/430207-18q 2005Taylor &Francis Group Ltd
DOI:10.1080/10670560500065454
LO SHIU HING
Introduction:casino politics,organized crime and the colonial state
The colonial state in Macau under Portuguese rule was marked by a symbiotic relationship between the corrupt bureaucrats who managed the casino industry and the casino capitalists.1While the casino capitalists relied on the political support of corrupt colonial bureaucrats to acquire and renew their casino franchise,the latter bene?ted?nancially from the lucrative business of casinos.As long as the casino capitalists managed their casinos effectively,organized crime that often persists in casinos did not emerge as a baf?ing problem.2Nevertheless,during the twilight of Macau’s colonial era,as this article will discuss,casino politics became more complicated and fragmented than ever before,leading to the proliferation of organized crime and the response from the People’s Republic of China(PRC). The response was the liberalization of the gaming industry in Macau—a trend that can be found in other parts of the world such as Britain and the United States.3 Macau’s handover from a Portuguese territory to a Special Administrative Region (SAR)of the PRC at midnight19December1999was under the spotlight of the international media.4To the international media,Macau was like a‘Crime Central’plagued by‘gangsterism’and it became‘Portugal’s sleepy and seedy last colony’.5 Macau was described as not only‘a shadowy blur of blackjack,roulette,poker 1.Lo Shiu Hing,Political Development in Macau(Hong Kong:The Chinese University Press,1995),pp.176–179.There are a few studies on the role of the state in Macau.See,for example,Beatrice Leung,‘Church-state relations in Hong Kong and Macau:from colonial rule to Chinese rule’,Citizenship Studies5(2),(2001),pp.203–219;and Susan J.Henders,‘So what if it’s not a gamble?Post-Westphalian politics in Macau’,Paci?c Affairs74(3), (Fall2001),pp.342–360.For an earlier study on the role of the capitalist class in Macau’s politics,see Lo Shiu Hing,‘Colonial policy-makers,capitalist class and China:determinants of electoral reform in Hong Kong’s and Macau’s legislatures’,Paci?c Affairs62(2),(Summer1989),pp.204–218.For the role of the state in East Asian economic development,see Jeffrey Henderson and Richard P.Appelbaum,‘Situating the state in the East Asian development process’,in Richard P.Appelbaum and Jeffrey Henderson,eds,States and Development in the Asian Paci?c Rim (Newbury Park:Sage,1992),pp.18–23.Also see Hilton L.Root,Small Countries,Big Lessons:Governance and the Rise of East Asia(Hong Kong:Oxford University Press,1996).By convention,a state has features such as a population,a government,territory and sovereignty.See Barry B.Hughes,Continuity and Change in World Politics: The Clash of Perspectives(New Jersey:Prentice-Hall,1994),p.64;and Andrew Vincent,Theories of the State (Oxford:Basil Blackwell,1987),pp.19–21.For Macau’s recent historical development,see Kenneth Maxwell,‘Macao:the shadow land’,World Policy Journal XVI(4),(Winter1999/2000),pp.73–95;and Herbert Yee,Macau in Transition:From Colony to Autonomous Region(London:Palgrave,1999).
https://www.doczj.com/doc/6514227167.html,anized crime in the casino industry usually includes money laundering,loan sharking,prostitution and other triad activities.For a useful discussion of organized crime,see Patrick J.Ryan and George E.Rush,eds, Understanding Organized Crime in Global Perspective:A Reader(London:Sage,1997).For organized crime in Hong Kong,Macau and Guangdong province,see Lo Shiu Hing,‘Cross-border organized crime in Greater South China’,Transnational Organized Crime,5(2),(Summer1999),pp.176–194.
3.For liberalization of the gaming industry in Britain and the United States,see Richard C.Morais,‘The stakes get higher’,Forbes5(9),(29April2002),p.25.For legalized gaming in the United States,see Cathy H.C.Hsu,ed., Legalized Casino Gaming in the United States:The Economic and Social Impact(Binghamton,NY:Haworth Hospitality Press,1999).
4.‘China made whole’,Opinion,Baltimore Sun,(22December1999);William Foreman,‘A hot hand—not handover—interests gamblers as Macau returns to China’,Associated Press,(December1999);Clay Chandler,‘China regains Macau after442years’,Washington Post,(20December1999),p.A01;Patrick Graham,‘Tiny enclave has gone as low as it can go’,National Post(Canada),(18December1999),p.A16;Martin Regg Cohn,‘A new era for Macau:welcome to the motherland’,Toronto Star,(20December1999),p.A3.
https://www.doczj.com/doc/6514227167.html,week25(51),(24December1999);Mark Landler,‘China’s troops cross into Macau and cheered by residents’,New York Times,(21December1999);Miro Cernetig,‘The communist Sin City:China is about to rule Macau,land of gambling and gangsters’,Globe and Mail,(18December1999).The CNN described Macau as‘a seedy territory best known for gangland assassinations’.CNN,‘Macau residents hope Chinese troops will deter crime’,(20December1999).
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ORGANIZED CRIME AND POLITICS IN MACAU and prostitution’,but also‘a mini replica of1920s Chicago,replete with machine gun assassinations outside casinos’.6Although Macau’s crime rate was relatively low compared with some American cities such as Las Vegas,its gangland violence during the?nal years of Portuguese rule‘badly dented the territory’s image’.7
The gangland violence in Macau was closely related to the way in which casinos were operated.Who could control casinos became a politically controversial issue. This article aims at analyzing the politics of the struggle for control over Macau’s casino industry.In view of the expiry of the casino franchise in Macau in2001,the Macau SAR Government decided to break the casino monopoly into three competitors.Liberalization of the gaming industry,from the PRC’s perspective, would strengthen the legitimacy and authority of Macau’s post-colonial state, stimulate its economic development,and maintain law and order.8
The casino industry is the pillar of Macau’s economy.In2001,about60%of the Macau Government’s revenue and35%of the enclave’s gross domestic product were generated by casino taxes,totaling about Macau Of?cial Pataca(MOP)$6billion.The gross annual revenue of Macau’s casinos ranged from MOP$12billion in1991to MOP$18billion in2001.9In2001,Macau’s11casinos employed some5,000people.In2000they recorded gross revenue of MOP$15.5billion,31.8%of which was paid to the Macau Government as monopoly franchise taxes.10Macau’s casino industry is viewed as one of the most pro?table in the world.One sociologist went so far as to label Macau as having a‘casino state’,meaning that Macau had built its government‘around the gaming industry’.11If casinos are occupying a central role in the economic vitality of Macau’s post-colonial state,their relationships deserve more scholarly attention than before. Casino politics in colonial Macau
Macau’s casino franchise began in1934when it was granted to the Tai Xing Company led by Fu Laorong.Realizing that the control of casinos was a lucrative business,the Macau Government raised the gambling tax in1961when Fu died and as Tai Xing’s franchise expired.12Stanley Ho Hung-sun,a Macau businessman who was born in Hong Kong and who?ed to Macau in1941when the Japanese invaded the British colony,sought the help of Hong Kong businessman Henry Fok Ying-tung to bid for the casino franchise.13Although the triads in Macau threatened to endanger
6.Anthony Spaeth,‘Macau’s big gamble’,Time Magazine154(24),(20December1999).
7.Joe Havely,‘What now for Macau?’,BBC News,(20December1999).
8.See‘The social and economic impact of liberalization of casino franchise’,China Review no.51,(March2002), pp.33–35.
9.Harald Bruning and Stella Lee,‘Las Vegas coming to Macau’,South China Morning Post,(9February2002).
10.Harald Bruning,‘Casino hopefuls offer to invest$23billion in Macau’,South China Morning Post, (8December2001).
11.Angela Veng Mei Leong,‘The“Bete-Ficha”business and triads in Macau casinos’,Queensland University of Technology Law and Justice Journal2(1),(2002),p.84.
12.Yizhoukan:Macau’s Return to the Motherland(Next Magazine),Special Issue on Macau,no.510, (16December1999),p.28.
13.Father to17children,81-year-old Stanley Ho is‘fond of women,tennis and ballroom dancing’.In the1930s his father Ho Sai-kwong lost the family fortune by supporting Jardine’s shares during the depression.Stanley Ho?ed from Hong Kong to neutral Macau during World War Two.He went to Macau with ten dollars in his pocket but became a millionaire before the age of20.See Victoria Button,‘Monopoly dead,long live the king’,South China Morning Post,(9February2002).
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his life,Ho succeeded in winning the tender for HK$410,000,000an amount ?nancially supported by Fok.14However,the triads mobilized beggars to sit in front of Ho’s new casino and threatened to terminate both the hotel and the Hong Kong-Macau ferry services.In response to the threats from triads,Ho’s subordinates paid off the beggars who no longer sat in front of his casino entrance in order to accommodate the casino tourists.He also rented a hotel from the Macau Government while at the same time maintaining the Hong Kong–Macau ferry service.In1962,Ho succeeded in opening his new casino.
Ho consolidated his political control over Macau’s casinos during the1980s.In the late1960s and the1970s,Ho’s Sociedade de Turismo e Diversoes de Macau(STDM) tried to stimulate the local economy by expanding its business.New hotels and casinos were built.In the early1980s,Fok was far more interested in investing in the PRC than in the STDM business.Other Board of Directors such as Yip Hon withdrew from the STDM because of sharp disagreement with Ho.Due to the de facto withdrawal of casino capitalists like Fok and Yip,Ho gradually dominated the STDM’s management.In1986,the Portuguese administration extended Ho’s casino franchise to2001without the PRC Government’s approval.Ho celebrated the extension of his franchise,but he did not sense the displeasure of PRC authorities.15 His relationship with the PRC was strained in the mid-1980s when he openly expressed his reservations about the feasibility of the PRC’s‘one country,two systems’as being applied to Hong Kong.
From the mid-1980s to the early1990s,Ho changed his management style by contracting out the running of individual high-stake gaming saloons in his franchised casinos to bidders.16Those who successfully won the contracts for operating gaming and VIP rooms were responsible for selling the gaming chips and attracting high rollers.17Through the STDM’s sub-contracting system,triad members gradually in?ltrated casinos to control the selling of gaming chips.Loan-sharking proliferated in casinos as triads attempted to reap quick pro?ts from casino gamblers.Triad members viewed the control of VIP rooms and gaming chips as a zero-sum game in which retaliation against individuals and competitors often led to bloodshed.The in?ghting amongst triad members,however,very soon escalated out of the STDM’s control.In short,organized crime in Macau’s casino industry began to grow in the wake of the STDM’s administrative decentralization.
By contracting out gaming rooms to different interests,the STDM became a victim of its new style of casino management.The emergent triads that penetrated and 14.Sing Tao Daily(Hong Kong),(20December1999),p.6.Also see Leng Xia,Aomen duchang fazhan[Macau Casino Development](Hong Kong:Mingliu,June1997),pp.42–48.According to Taiwan’s Central Daily News,in 2001Henry Fok and Stanley Ho were both ranked as the452billionaires in the world.See Central Daily News, (23June2001).
15.Sing Tao Daily,(20December1999),p.5.
16.Liu Pingliang,‘The development and direction of the gambling industry’,in Yu Zhen,ed.,Aomen huigui qianhou de wenti he duice[The Problem and Policies of Macau Before and After the Transfer of Sovereignty](Hong Kong:Mingliu,June1999),p.336;and Liu Pingliang,‘Macau’s gambling industry in?fty years’,Asian Studies (Hong Kong Chu Hai College),no.36,(18December2000),pp.111–138.Also see Bertil Lintner,‘End of an empire’, Far Eastern Economic Review,(24December1998),p.23,which reported that the STDM denied the existence of such a‘subcontract’system.
17.Sing Tao Daily,(20December1999),p.6.Also see Lo Shiu Hing,‘Gambling and organized crime:towards the end of the Stanley Ho connection?’,China Perspectives no.26,(November/December1999),pp.56–65.
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ORGANIZED CRIME AND POLITICS IN MACAU operated casinos no longer regarded the STDM as an authoritative arbitrator of their disputes.Triad gangs such as14K and Soi Fong became the rising casino forces in Macau.A well-known example was the14K gang led by Wan Kuok-kuoi,who was nicknamed‘Broken Tooth’.The traditional balance of power in the STDM was gradually tipped in favor of the newly emerging and arrogant triad bosses.18 Organized crime and casino politics in the twilight of the colonial era
‘Broken Tooth’was a rapidly emerging casino operator whose?amboyant behavior subsequently alienated the Macau Government.Unlike many Hong Kong triad bosses who tended to maintain a relatively low pro?le in public,Wan broke the traditional triad code of secrecy by boasting thousands of followers,accepting interviews by the international and Hong Kong media and even?nancing the production of a?lm about himself.19When Hong Kong triads attempted to in?ltrate Macau’s casinos in the early1990s,Wan’s14K expelled them out of the Portuguese territory.In1993,the mysterious assassination of Chan Yiu-hing—a member of the Hong Kong triad Sun Yee On and nicknamed the‘Tiger of Wanchai’—outside a Macau hotel signaled a power struggle between Macau’s14K and Hong Kong’s Sun Yee On.20Following Chan’s death,the14K strengthened its control of Macau’s casinos by clashing violently with Wan’s former partner,nicknamed‘Market Wai’(who became a manager of a new casino),and with his rival triad Soi Fong.21In1997, the use of AK47ri?es to?re at the main door of the New Century Hotel,which opened the new casino operated by‘Market Wai’,was a testimony to Macau’s uncontrollable triad wars.Shortly before the return of Hong Kong’s sovereignty from Britain to the PRC on1July1997,there were rumors that Macau’s in?uential pro-Beijing leaders intervened in the triad wars and successfully brought about a temporary truce.
The violent political struggle over casinos,however,returned to Macau soon after Hong Kong’s handover and it delegitimized the colonial state.There were bomb attacks on citizens,attempted assassinations of government of?cials and mysterious kidnappings of some wealthy people and their children.Gangsters kidnapped 18.If the balance of power can contribute to the maintenance of international order,it can arguably maintain law and order in Macau’s casino industry.For the balance of power,see Hedley Bull,‘The balance of power and international order’,in Michael Smith,Richard Little and Michael Shackleton,eds,Perspectives on World Politics (London:Croom Helm,1987),pp.94–103.
19.AFP,‘Macau looks to China to rid streets of gangsters’,(15December1999).
20.In the1980s,the Hong Kong government attempted to prosecute Sun Yee On’s leader or dragonhead,but it was unsuccessful.Since then,Sun Yee On leaders have begun to invest in legitimate businesses in South China while at the same time establishing a power base in the Hong Kong?lm industry.Members of Sun Yee On remain active in the Hong Kong SAR although their in?uence in Wanchai and Tsimshatsui districts has been curbed by other triads.For triads in Hong Kong,see W.P.Morgan,Triad Societies in Hong Kong(Hong Kong:Government Press,1989).Also see Martin Booth,The Triads:The Chinese Criminal Fraternity(London:HarperCollins,1990);Martin Booth,The Dragon Syndicates:The Global Phenomenon of the Triads(London:Doubleday,1999);and Chu Yiu Kong,The Triads as Business(London:Routledge,2000).
21.One leader of Macau’s Soi Fong,nicknamed‘Soi Fong Lai’,?ed to Canada in1997.The windows of his Canadian home were shot mysteriously.It remains a mystery why Soi Fong Lai was allowed to enter Canada at that https://www.doczj.com/doc/6514227167.html,i appeared to leave Canada quickly when his life was endangered in the summer of1997.Some Macau gangsters set up Soi Fong in the1930s,unlike the14K that was founded by a Kuomintang Lieutenant-General,Kot Siu-wong,in Guangzhou in the late1940s.Harald Bruning,‘Gangsters who have forgotten the rules’,South China Morning Post,(12December1999).
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a member of the Legislative Assembly.22The Macau Government viewed the deterioration of law and order as so intolerable that it had to take swift action to penalize the triads.Since Wan’s14K was so de?ant of any political authority,he became the immediate target of the Government and was arrested in May1998.He was jailed in Coloane Island’s main prison where some corrupt guards allowed him to have cell phones,karaoke and parties.After the court sentenced Wan to15years of imprisonment on23November1999,he was transferred to a new and high-security prison in Coloane Island.23Broken Tooth’s court trial was marred by complaints from his defense lawyers that the Portuguese administration did not have suf?cient evidence to prosecute him for leadership of the14K.The court evidence was derived largely from Wan’s interviews with the mass media.After Broken Tooth’s conviction,some triad members abandoned their weapons,including AK47ri?es,on the streets of Macau—an indication that they were afraid of the territory’s imminent transfer of administrative power from Portugal to the PRC.24With the downfall of Broken Tooth,the14K has become relatively disorganized and leaderless,whereas the leaders of its rival Soi Fong were persuaded by pro-Beijing Macau?gures to maintain a low pro?le during Macau’s handover.25
The Broken Tooth case demonstrated that new and emergent casino capitalists no longer viewed Stanley Ho as the authoritative patriarch in Macau’s casino industry. Once the most powerful patron in the casino industry,Ho in reality could not command the obedience of aggressive casino interests of the gangs such as Broken Tooth.Furthermore,the Macau Government failed to regulate properly and vigorously the casino industry in the?rst place,leaving its management entirely in the hands of the STDM.But once the STDM sub-contracted out its casinos and gaming rooms to triad-related forces,the Macau Government found it impossible to regulate the casino https://www.doczj.com/doc/6514227167.html,pounding the problem was police corruption that rendered the colonial state incompetent in dealing with triad wars and kidnapping activities.In the late1990s,the Macau police had about4,300in its ranks and triad members outnumbered them.26Although the Portuguese administration tried to clean up the police force during the late1990s by forcing some bad elements to retire and leave,reforms were too little too late.The image of the Portuguese administration had already been regionally and internationally tarnished.In particular,the Hong Kong press and electronic media often portrayed Macau as such a dangerous city that many Hong Kong people no longer visited the Portuguese enclave.
In brief,casino politics became complicated and violent as new triads?lled in the administrative vacuum left by the STDM.New triad bosses challenged the authority and legitimacy of both the colonial state and the old casino capitalists.In response, the colonial state was determined to take action against organized crime,thus trying to restore the balance of power in favor of the STDM.
22.Dongzhoukan(Eastweek)no.328,(4February1999),pp.26–34.
23.According to the anti-triad law passed by the Macau Legislative Assembly in July1997,leadership of a triad is punishable by imprisonment from eight to15years.Bruning,‘Gangsters who have forgotten the rules’.
24.But the underworld accused the Macau police of planting the weapons on the streets to‘make themselves look good’.Niall Fraser,‘Broken Tooth suffers depths of depression’,South China Morning Post,(20December1999).
25.Yizhoukan(Next Magazine)no.510,(16December1999),pp.71–72.The Thai Government adopted a vigilant attitude toward the possible in?ux of Macau triad members after the conviction of the Broken Tooth.
26.Bruning,‘Gangsters who have forgotten the rules’.
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Response from the PRC Government to casino politics and organized crime
In response to organized crime and gangland violence in Macau,the PRC Government decided to station the People’s Liberation Army(PLA)in the territory. In early1999,the PRC’s Deputy Prime Minister Qian Qichen said that the PRC would send an advance guard to Macau before the handover.His remarks displeased Portugal’s President Jorge Sampaio,who in March1999threatened to boycott the handover ceremony.After a visit by the PRC President Jiang Zemin in October, Sampaio withdrew his threat because Beijing reassured Lisbon in a written explanation that the PLA would not interfere with the Macau SAR’s internal affairs.27For the PRC Government,triad activities in Macau became a national security concern in December1999,when top PRC leaders would attend the handover ceremony.The PRC Government was also alienated by a mysterious attack on a mainland Chinese of?cial in Macau on2December1999.28‘Several years’before Macau’s handover,the PRC Government had begun to send of?cers of the Ministry of National Security to Macau,collecting intelligence on criminal elements and penetrating into‘different social strata’so as to ensure a smooth handover.29The fact that the PLA marched into Macau at noon,12hours after the handover ceremony, unlike the PLA Garrison which entered Hong Kong’s border immediately after the handover at midnight,fully demonstrated Beijing’s con?dence about its security preparation in Macau.To Beijing,the stationing of the PLA would constitute a psychological deterrent to the triad violence and a stabilizing instrument for Macau’s post-colonial state.
Organized crime in Macau became such a national security concern to Beijing that the Guangdong province and the Hong Kong SAR Government took measures to echo Beijing’s policy directive of ensuring Macau’s smooth handover.In October 1999,the Guangdong court sentenced Ip Shing-kin,a triad boss of Macau’s Big Circle Gang,to death.In December,the Guangdong Public Security Bureau arrested members of Macau’s Soi Fong and uncovered their illegal weapons in Zhuhai and Foshan.30Some Soi Fong members in Macau were frightened and decided to abandon their weapons on Macau’s streets just days before the handover. On17December,the Hong Kong police inspected nightclubs and saunas in Kowloon and the New Territories,targeting the triads and demonstrating its full support for a peaceful transfer of power in Macau.31The local states in Guangdong and Hong Kong were politically mobilized to consolidate the authority and legitimacy of Macau’s post-colonial state.
To Edmund Ho,the Chief Executive of the Macau SAR Government,the presence of the PLA in Macau would be a‘psychological support for making drastic changes in the police’because if the police forces were resistant to reform efforts,he would 27.Harald Bruning’s interview with Sampaio,‘Sino-Portuguese ties enter new phase’,South China Morning Post, (20December1999).
28.Dongzhoukan no.372,(9December1999),p.7.
29.Ibid.,pp.8–9.
30.Shijie Ribao(North American Chinese daily),(15December1999),p.A17and(18December1999), p.A16.The Zhuhai authorities arrested3,000people,including prostitutes and criminal elements,before Macau’s handover.
31.Dagong Bao(Ta Kung Pao,Hong Kong),(19December1999),p.A5.
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threaten to‘put in the soldiers’.32Although960PLA soldiers formed the Macau Garrison,700were sent to the SAR.33The PLA of?cers stressed that the troops would be ready to help the SAR Government cope with any internal disturbance if the latter requested them to do so.34
Many Macau residents were joyful about the presence of the PLA in the SAR. Hundreds of thousands of Macau citizens lined up on the streets to welcome the PLA—a far cry from the relatively nervous attitude of many Hong Kong people toward the PLA’s presence in the Hong Kong SAR.One Macau taxi driver said that he‘only wish[ed]it could come in earlier to frighten the triads’.35Another citizen supported the stationing of the PLA because‘the Portuguese administration is corrupt and a major failure’.36Although the Portuguese succeeded in helping Macau develop its infrastructure,economy and the legal system,their failure in controlling the casino industry and combating crime in the1990s undeniably tarnished their withdrawal from their last colony in Asia.As one of the PRC state apparatuses,the PLA served as a political menace to Macau’s organized crime.
The PRC Government mapped out its strategy concerning casino politics and franchise in post-colonial Macau.The PRC State Council’s Hong Kong and Macau Affairs Of?ce sent a delegation led by Director Liao Hui to Las Vegas,studying the ways in which casinos were operated in America.37Liao then submitted a report to the Politburo of the Chinese Communist Party(CCP),suggesting that the Macau triads,the CCP and the People’s Liberation Army should not meddle in the operation of casinos in post-1999Macau.38Moreover,casino management in Macau would have to be‘modernized’along the lines of Las Vegas.39It was crystal clear that the central government had the political will to transform the violent and fragmented casino politics into a peaceful and manageable one.
Response from the post-colonial state:Chief Executive Edmund Ho
and casino capitalist Stanley Ho
Some members of the Macau community demanded that the SAR Government should exert control on the casino industry.A pro-democracy legislator in Macau,Ng Kuok Cheong,believed the secrecy of casino operation contributed to its in?ltration by triads. Sino–Latin Foundation executive director Gary Ngai Mei-chong said:‘The public is ill-informed about the casinos.We don’t know anything on how it really operates’.40
32.Cited in Mark Landler,‘Colonialism ending in Asia as China reclaims Macau’,New York Times,(18December1999).
33.Ming Pao(Hong Kong),(20December1999),p.A10.
34.On10November1999,when Beijing announced that the Macau Garrison was formed,China’s CCTV interviewed the Garrison Chief who emphasized that the PLA would be‘ready to help the Macau SAR Government maintain social stability’.The CCTV’s interview with the Garrison Chief was broadcast in Hong Kong on the night of 11November1999.Interestingly,the CCTV interview was far more detailed than the Hong Kong and Macau media’s interview with the Macau Garrison Chief,whose response to questions from the Hong Kong reporters did not emphasize the PLA’s readiness to maintain Macau’s social stability.
https://www.doczj.com/doc/6514227167.html,N,‘Will China clean up Macau’s crime problem?’,(20December1999).
36.Ibid.Channel NewsAsia(Singapore),‘Macau residents looking forward to China homecoming’,(16December 1999).
37.Cup Magazine no.28,(21November2001),p.27.
38.Ibid.
39.Ibid.
40.Hong Kong Standard,(20December1999).
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ORGANIZED CRIME AND POLITICS IN MACAU Some Macau residents complained about the relatively high fares charged by the Hong Kong-Macau ferry,which was nearly monopolized by Stanley Ho’s Hong Kong-listed Shun Tak Company.In response to public demands and criticisms,in February2000the Far East jetfoil service—a subsidiary of Ho’s Shun Tak Holdings—planned to reduce fares on the ferry services between Hong Kong and Macau.Nonetheless,Stanley Ho’s Turbojet faced increasing competition from its rival,the New World First Ferry’s Service,which in April2002reduced the fares from Hong Kong to Macau.41The STDM was under outside pressure to maintain its competitive edge.
The STDM could be viewed as Macau’s casino government or‘casino state’that coexisted with the colonial state.It paid tax covering about60%of the government revenues.42The STDM was Macau’s big employer with some10,000workers and it needed to pay a special tax of31.8%of gross proceeds from casinos.43Moreover,it was required to pay an annual premium of HK$150million and a surcharge of1.6% to a Macau cultural foundation.The STDM also dredged Macau’s harbor.Stanley Ho was at one time described as a‘paternal’,‘possessive’and‘protective father’or ‘patriarch’monopolizing Macau’s casinos.44On13December1999,Ho opened his tenth casino in Macau,trying to demonstrate the STDM’s con?dence in the territory’s future.45Ho argued that more competition would reduce government revenues since casinos would cut betting prices to attract customers.He said:
Agreed,this monopoly may one day be broken.But when,when is the right time?I certainly believe that2001is not the appropriate date to break the monopoly.I’m hoping the government will give me an extension of at least three to?ve years after2001.46 Chief Executive Edmund Ho(not related to Stanley Ho)promised to reform the casino industry.He told Hong Kong reporters that a commission would be set up to look into the gambling franchise beyond2001.
Everybody is expecting that the gaming industry needs reform.Whether2001is the right time or it should be a bit later,well,we don’t want to rush into things...I think any reasonable people would agree that we are facing some problems in the gaming industry.
But without further study of the situation,I think one can’t say that just getting rid of the monopoly will solve all the problems.47
While Edmond Ho implied that Stanley Ho should realize the need to reform Macau’s casinos,the former appeased the latter’s anxiety by saying that there should be no drastic changes to the casino industry.48
The Macau SAR Government approached casino operators in the United States, South Korea,Malaysia,Australia and Japan to explore their interest in investing in
41.Felix Chan,‘Fare war looming on ferries to Macau’,South China Morning Post,(30March2002).
42.Gambling and tourism account for about40%of Macau’s GDP and provide about60%of the government revenue.Jo Bowman,‘Las Vegas of Asia is the best approach’,South China Morning Post,(20December1999).
43.Tessi Cruz,‘Casino monopoly to stay,for now’,Hong Kong Standard,(20December1999).
44.Bruce Gilley with Dan Biers,‘Stanley Ho plays on’,Far Eastern Economic Review,(9December1999).
45.Shijie Ribao,(14December1999),p.A17.
46.Gilley with Biers,‘Stanley Ho plays on’.
47.Jason Gagliardi and Harald Bruning’s interview with Edmund Ho,‘Leader looks to future’,Sunday Morning Post,(19December1999).Also Hong Kong Standard,(20December1999).
48.He was cautious and slightly distanced himself from Stanley Ho in public,avoiding an image of having a stance on the casino franchise.Dongzhoukan no.373,(16December1999),pp.26–30.
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Macau’s casino industry.49It laid down three conditions for overseas casino capitalists. First,the investment in Macau would generate employment and investors should hire a ?xed percentage of local workers.Second,investors should shoulder the?nancial responsibility of social projects,such as schools and public facilities.Third,they should support charity work in Macau,just like the Hong Kong Jockey Club.In fact,the idea of imitating the Hong Kong Jockey Club was raised by Henry Fok in May1999.50Fok helped Stanley Ho obtain the casino franchise in1961on the assumption that it would become a non-pro?t enterprise.In1986,however,Fok resigned from his STDM directorship.At that time,there were speculations that Fok tried to distance himself from Stanley Ho,who got his casino franchise extended by the colonial administration without China’s agreement.Fok’s remarks in May1999could be interpreted as a disapproval of the STDM’s way of casino management.Given Fok’s respected status in the PRC Government(he is Vice Chairman of the National Committee of the Chinese People’s Political and Consultative Conference),his view on Macau’s casino industry was interpreted as the of?cial position of the PRC Government.51
Stanley Ho was initially resistant to any change in Macau’s casino franchise.He said:‘If there is more than one licensee,there will be?ghting between the two licensees.This would be dangerous’.52In the mind of Stanley Ho,the triad problem would disappear after Macau’s handover.He said triads
are not afraid of good legal systems like Macau and Hong Kong,where the judges are so lenient and conviction is not easy.The triads are most afraid of the communists and capital punishment.You can expect a very peaceful and sleepy Macau again.53
He claimed that it would only take‘about ten days’for the STDM to negotiate with the SAR Government over the casino franchise.54In August2001Stanley Ho claimed that Edmund Ho had promised to reserve a casino-operator license for him, but the Chief Executive immediately rejected his claim.Stanley Ho remarked:‘The Chief Executive has told me that he will reserve one license for me’.55Later Edmund Ho said that Stanley Ho’s company‘will have to bid for the license like any other company’.56The Chief Executive added that while the Legislative Assembly was discussing a bill that would liberalize the gaming sector,the Macau Government ‘understood’Stanley Ho’s‘con?dent attitude’.57In response,Stanley Ho clari?ed his remarks in the following way:‘What I said yesterday was that the Chief Executive expected me to bid for the license,not that the Chief Executive had reserved a license for me.I don’t know whether I spoke too fast or you do not hear me clearly’.58 Stanley Ho understood the political sensitivity surrounding the casino franchise and
49.Sing Tao Daily,(23December1999),p.9.
50.Yizhoukan no.376,(23May1999),pp.40–44.
51.Sing Tao Daily,(20December1999),p.5.For Fok’s background,see Andy Ho et al.,eds,Who’s Who in the HKSAR(Hong Kong:PA Professional Consultants,2001),p.119.
52.Gilley with Biers,‘Stanley Ho plays on’.
53.Interview with Stanley Ho,‘People don’t have to be afraid anymore’,Newsweek,(13December1999).
54.Sing Tao Daily,(20December1999),p.5.
55.Harald Bruning,‘Casino license reserved for me,says Stanley Ho’,South China Morning Post,(23August 2001),p.H2.
56.Ibid.
57.Ibid.
58.Harald Bruning,‘Gambling tycoon feels the heat’,South China Morning Post,(24August2001),p.H4. 216
ORGANIZED CRIME AND POLITICS IN MACAU then had to clarify his remarks swiftly.The casino tycoon also realized that the post-colonial state leader,Edmund Ho,attempted to maintain a degree of autonomy vis-a`-vis all the casino capitalists,unlike the colonial state that had forged an unholy alliance with the casino elites.
On the other hand,Stanley Ho’s STDM took urgent measures to protect its casino franchise beyond2001.First,the STDM lobbied the Macau SAR Government for an extension of its franchise for‘three or more years’.59Ho tried to use his personal connections in Zhuhai to lobby the central government in Beijing.60The STDM argued that since it was a big employer in Macau,any change in the casino franchise would affect the territory’s employment condition.Second,the STDM expanded its number of casinos to11so as to maximize its opportunities of extending the casino franchise beyond2001.The casino operators under the STDM’s management prepared to be split into different legal entities to bid for the new franchise in2001,although some operators were Stanley Ho’s close relatives.61Third,the STDM tried to dominate the Hong Kong-Macau ferry services so as to maximize its bargaining power.Fourth,in preparation for the worst-case scenario,the STDM diversi?ed its investment to North Korea,Vietnam and the Philippines,while at the same time applying for the on-line gambling license in Macau.62Ho’s investment in a?oating restaurant in the Philippines led to opposition from the Catholic Church there and some Congressmen,who requested him to‘clear up unveri?ed reports linking him to Hong Kong crime syndicates’.63Eventually,Ho cancelled his trip to attend a planned ceremony for the restaurant in January2000.64 In any event,the STDM positioned itself to bid for the casino franchise beyond 2001.
59.Sing Tao Daily,(20December1999),p.5.
60.Ibid.
61.Ho’s casinos were managed by his wife,concubines and relatives.Yizhoukan no.471,(19March1999), pp.38–48.
62.In1999,Ho opened a HK$233million casino in Pyongyang,a location next to another casino managed by Hong Kong entertainment tycoon Albert Yeung Sau-shing.Yeung was once regarded as the‘largest foreign investor in North Korea’in2000and he opened a?ve-star hotel in the Rajin-Songbon free economic trade zone,which is550 kilometers northeast of the capital Pyongyang.Wanda Szeto,‘Emperor’s casino gamble’,South China Morning Post, (4September2000).
63.‘Ho threatens to give up on Philippines’,Hong Kong Standard,(25January2000),p.A3.The Catholic Church warned the Philippine Government against granting Ho a license to operate a casino franchise,saying that it would contribute to a rise in crime.The former Philippine President Joseph Estrada expressed support for his police of?cials to check Ho’s background,saying that‘there is nothing wrong with checking a man’s background’.See‘Estrada backs probe on Stanley Ho deals’,Hong Kong Standard,(27January2000),https://www.doczj.com/doc/6514227167.html,ter,the National Police Deputy Director-General Pan?lo Lacson said:‘There is nothing in our?les or the?les of other governments to connect him (Ho)to illegal activities’.See‘Casino tycoon cleared of any criminal links’,Hong Kong Standard,(18February 2000),https://www.doczj.com/doc/6514227167.html,cson said a widely circulated report about Ho was traced to a‘non-existing unit in Canada’and‘that makes it(the report)fraudulent’(p.A3).
64.In a press statement published as a paid advertisement by two Philippine newspapers,Ho announced the cancellation of his trip to Manila.The statement also said:‘As a well-known reputable businessman of substantial standing in the Asian and wider international communities,Dr Ho said he is well used to the spotlight and even occasional controversy surrounding his name.However,the recent campaign of unsubstantiated allegations made in relation to his investments in the Philippines has been so vilifying and bitter and cynical as to be completely unacceptable’.Ho also said:‘My investments remain most welcomed by the Macau Government as they are all over the world except,perhaps,the Philippines and from the viewpoint of the economy here,this is indeed a shame’.See ‘Charges“so vilifying as to be totally unacceptable”’,Hong Kong Standard,(31January2000),p.A4.The Philippine Foreign Ministry said in December1999that it had no information that Ho had been involved in any‘illegal’activity.
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Nevertheless,some casino capitalists in Macau hoped that the STDM would no longer monopolize the casino franchise.David Chow Kam-fai,a casino manager of the Legend Club and a directly elected legislator,maintained that Macau’s casinos should learn from Las Vegas where casinos are managed effectively.He went so far as to claim that‘the older generation,like“Uncle”Stanley Ho,needs to change a little bit,look at things differently’.65Rumors were rife that some casino operators had participated in the1996Legislative Assembly election in order to politically position themselves for the legislature’s discussion of the casino franchise after Macau’s handover.66
The political realignment in Macau’s casino industry gradually evolved.In2001 David Chow cooperated with Stanley Ho in a US$112million Fisherman’s Wharf-style project,which would give Macau an upper hand over Hong Kong in building more attractive tourist spots.67The STDM had a51%stake in the project and the theme park would be completed in2003,two years prior to the completion of the Disneyland project in Hong Kong’s Lantau Island.The Fisherman’s Wharf is modeled on its counterpart in San Francisco.Apart from a man-made volcano producing arti?cial lave,the wharf will encompass gambling venues,souvenir shops, restaurants,a discotheque for4,000people,a mock medieval castle and a traditional Chinese?shing village with seafood restaurants on sampans.Clearly,the STDM hoped to cooperate with casino capitalist David Chow to reshape Macau’s tourist industry in such a way as to prepare for competing for one of the three casino franchises.
While the STDM adapted to the changing political circumstances,the post-colonial state has encountered a similar challenge.In order to strengthen the capacity of the post-colonial state in controlling organized crime,Edmund Ho vowed to reform the police force.He emphasized that the time when‘police and gangsters are not separated’had already passed.68According to Edmund Ho,the Judicial Police would be merged with the Security Police.The former was under the command of the Judicial Under-Secretary and the latter under the Security Under-Secretary in Portuguese Macau,thus hampering the effectiveness of the?ght against crime.69 Ho told the Hong Kong reporters that
The police force will be better managed,brought under one command.The big step will be,when the time is right,a merger of the different police forces[including Judicial,Security,Marine and Customs police].This will allow for better management and utilization of resources.[Reforming the police]will always be a political issue of great signi?cance because of the attention the world has given to security problems in Macau.So it’s something much bigger than just law and order.It would re?ect on the effectiveness of the SAR Government as a whole (70)
65.Jason Gagliardi,‘Developer gambles on enclave’s future’,South China Morning Post,(27November1999).
66.Sing Tao Daily,(20December1999),p.6.
67.‘Macau park to upstage Disneyland’,South China Morning Post,(25May2001);and Harald Bruning,‘Casino wharf approved’,South China Morning Post,(9October2000).
68.Ming Pao,(21December1999),p.A2.
69.Sing Tao Daily,(19December1999),p.11.
70.Sing Tao Daily,(29December1999).The Judicial Police took measures to internally check the behavior of of?cers.
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ORGANIZED CRIME AND POLITICS IN MACAU He also remarked that the combat against crime would be‘elevated to the political level’and that he would use‘the entire governmental resources,policies and laws to maintain Macau’s security and stability’.71Backed by the PLA’s presence,the reformed Macau police constitute an effective state apparatus that?ghts against organized crime.
Edmund Ho warned the triads of understanding the‘bottom line’of the Macau SAR Government,which‘will not tolerate the type of attitude they had in the past’.72He remarked that‘if you are in the underworld,learn to keep it under’.73To Ho,the Macau underworld has to keep a low pro?le,unlike the behavior of Broken Tooth. In reality,before Macau’s handover,the underworld‘gave face to Beijing’and Edmund Ho by ordering nightclubs and saunas to refrain from advertising their brothel-like services in the mass media at least in the short run.74After the conviction of Broken Tooth,14K became disorganized and leaderless.Although Soi Fong is taking advantage of the political vacuum in the underworld to become the most in?uential triad in the Macau SAR,75it is unlikely to adopt a high pro?le as with Broken Tooth’s14K.
Although Edmund Ho vowed to increase the power of the anti-corruption commission,76it remains to be seen whether the commission will become more powerful and effective than before.The anti-corruption commission in Macau under Portuguese rule lacked legal power,manpower and resources to?ght bureaucratic corruption.After all,Macau has been affected by a social practice in which citizens are in general reluctant to antagonize friends and relatives by exposing their misdeeds and corrupt act.Unless the anti-corruption commission is empowered legally and ?nancially,and unless citizens are educated and encouraged to report corrupt cases to the commission,anti-corruption remains an uphill task for the Macau SAR Government.
However,crime control has become successful since Macau’s return to the PRC. The homicide rate fell72%one year after the handover.77The Secretary for Security, Cheong Kuoc-va,said the overall number of crimes including homicides,kidnapping and robbery cases dropped by3.64%from2000to8,925in2001.78Yet,the number of drug traf?cking cases increased37.5%from128in1999to176in2000.Cheong attributed the decline in crime rate to greater ef?ciency on the part of the5,500-member Macau Security Forces.Still,critics pointed out that as long as casinos and saunas are persisting in Macau,it is dif?cult to control organized crime effectively. Transnational crime syndicates arranged Russian and Eastern European prostitutes to travel to Thailand,Singapore,Japan,South Korea and Macau where they can reap
71.Sing Tao Daily,(20December1999).
72.AFP,‘Macau looks to China to rid streets of gangsters’,(15December1999).
73.Cited in Landler,‘Colonialism ending in Asia as China reclaims Macao’.
74.The World Journal,(19December1999),p.A7;Yizhoukan no.510,(16December1999),p.74.But prostitutes and loan-sharking activities returned to Casino Lisboa one week after the handover.Antoine So and Adam Lee,‘Macau business back to normal’,South China Morning Post,(29December1999).
75.Sing Tao Daily,(19December1999),p.15.Another in?uential triad is Shing Yee,which has‘several hundred members’.
76.Sing Tao Daily,(21December1999),p.1.
77.Harald Bruning,‘Macau homicides tumble since handover’,South China Morning Post,(18January2001).
78.Ibid.
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quick pro?ts and then leave.79One commentator described the dark side of Macau’s casino industry in the following way:
The demi-monde of the gaming industry includes an army of loansharks,corrupt gaming-chip dealers,hangers-on and other parasitic elements.Although casino loansharking is illegal,the trade in junket chips for high-stake gamblers takes place in a legal vacuum.
Junket chips are sold as part of gambling packages that might include a ferry ticket,hotel accommodation and access to certain gaming halls.The chips are not redeemable for cash, although winnings can be taken in the form of regular chips that are redeemable for cash.
The bizarre Cantonese jargon for the gambling industry’s subculture resembles a freak show.Loansharks are known as‘big ear holes’(dai yi lung),chip dealers are‘boys?ddling with chips’(dap mah jai)and hangers-on,who request tips from gamblers in return for unsolicited advice,are people who‘scratch someone’s sore feet’(ngau laan geuk).80
As long as criminal elements are embedded in the subculture of the casino industry, the combat against organized crime remains a daunting task for the Macau Government.
Casino politics and the post-colonial state:new casino franchises
and the three competitors
The post-colonial state was keen to break the casino monopoly so as to restore law and order in the Macau SAR.In July2001,the Macau Government announced that three casino operators would be allowed in Macau.81The new licenses would initially run for between eight and20years,and they could be extended by the Chief Executive to a maximum of25years per operator.On2November2001,the Macau Government launched the bidding process for the three franchises.Three of the21 original bidders were excluded from the tender process due to the fact that they ‘failed to comply with the basic requirements’which had been laid down by the Macau Government.82The three granted franchises would have a maximum duration of25years.The18bidders presented their plans to the Macau Government’s Casino Tender Commission in early January2002.
In February2002,two Las Vegas-based gambling giants and Stanley Ho’s new company were given permission to open casinos in Macau.They were(1)the Wynn Resorts project led by Las Vegas casino magnate Steve Wynn;(2)Ho’s newly
79.See Jason Gagliardi,‘Mean streets of Macau’,South China Morning Post,(20December2000).
80.Harald Bruning,‘Bets laid on demise of enclave’s gambling monopoly’,South China Morning Post, (23October2000).
81.South China Morning Post,(14July2001).In2000,the Macau Government hired an international consultancy ?rm Arthur Andersen to prepare a study on Macau’s gaming industry.The study had three phases.The?rst phase reported on how the gaming industry worked in Australia,Britain and the United States.The report of the?rst phase was paid HK$600,000.Phases two and three looked at the operation of the Macau gaming industry and came up with suggestions on aspects such as legislation,management and taxation.The?nal report was completed in mid-2001.See Harald Bruning,‘Macau hires?rm to shake up gaming’,South China Morning Post,(24August2000).
82.Harald Bruning,‘Top Macau casino bid offers$23.4billion investment’,South China Morning Post,(9January 2002).These companies which were ousted included Art Concept International Gaming Resort Company Limited, Kao U Investment Limited,and CM Development Limited.The Art Concept International was majority-owned by Michael Mak and his wife Katie Chan.Mak is the son of Winnie Ho,the sister of Stanley Ho.See‘Casino bidders ousted’,Hong Kong iMail,(29December2001),p.A2.The other bidders included some of the world’s best-known gaming operators,like MGM Mirage,Crown,Park Place,Sun and Aspinalls Club.See Harald Bruning,‘Casino bidders may team up to win’,South China Morning Post,(13December2001).
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ORGANIZED CRIME AND POLITICS IN MACAU formed Sociedade de Jogos de Macau(Macau Gaming Company or SJM);and(3)the Galaxy Casino that was composed of a joint venture between the Venetian casino owned by Sheldon Adelson and such Hong Kong businessmen as property tycoon Lui Chi-woo.83The three companies defeated the other15bidders because,according to the Macau Government’s Casino Tender Commission,their proposals‘were the most advantageous for Macau’.84Francis Tam Pak-yuen,the head of the Casino Tender Commission,said Ho’s new company SJM won because of its‘great experience’and the ability to‘maintain stability in Macau’s gaming industry’.85The SJM is actually‘STDM wearing a new coat’and it will pay35%of the casino gross revenue as taxes,compared with the previous rate of31.8%.86Furthermore,an additional3% of the gross revenue will be deducted by the Macau Government to fund cultural, social and public infrastructure projects.Legally,the STDM’s11casinos,330 gaming tables and7,000employees were transferred to the new SJM on31March 2002.The SJM’s18-year concession agreement will expire on31March2020. According to the contract signed between the SJM and the Macau Government,the former‘is obligated to ful?ll the projected investment of over HK$4.7billions.Any dividend in investment could be designated to the expenditure of projects that would bene?t the Special Administrative Region’.87
The end of the casino monopoly has brought about new ideas of rebuilding Macau’s gaming industry.Wynn Resort and Galaxy Casino had ambitious plans to develop their15-year casino franchises.Both asked for a?ve-year extension to their 15-year contract as a condition for signing the license agreements.88Wynn said after winning the gaming franchise:‘Our facilities in Macau will be resorts that contain elements not just of gaming,but fanciful restaurants and imaginative use of interior design—things that motivate people all over the world in their selection of where to spend their leisure time’.89Dubbing himself‘a China business virgin and new Macau homeboy’,Wynn humbly emphasized that he would need to learn more about the regional market before deciding his business strategies in Macau.90Galaxy mapped out a93-hectare site to build a complex parallel to the lavish US$1.5billion Venetian resort in Las Vegas.91It also pledged to invest US$1billion to build‘an Italian-style casino resort complex replete with gondolas plying Venice-like canals’.92
Prior to the entry of Wynn Resort and Galaxy Casino into Macau’s casino industry, the STDM had long encountered governing crises in the early2000s.In2000, 83.South China Morning Post,(9February2002).Also see Oriental Daily,(27May2002),p.A25.Also see Macau Government Information Bureau,‘Tender Committee for Gaming Concession tender announced the provisional results of the tender’,(8February2002).
84.Bruning and Lee,‘Las Vegas coming to Macau’.
85.Ibid.
86.Harald Bruning,‘Solo reign of?cially over but Stanley Ho still king of Macau’,South China Morning Post, (1April2002).
87.Macau Government Information Bureau,‘SAR Government signs concession contract with Macau Gaming Company’,(28March2002).
88.‘Ho puts chips in’,Hong Kong iMail,(29March2002),p.A3.
89.David Devoss,‘The two Las Vegas raiders’,Asia Inc.11(3),(April2002),p.17.Also see Associated Press,‘Wynn promises Las Vegas touch for Macau’,(24June2002).
90.Victoria Button,‘I’m in it for the fun,professes new Macau“homeboy”’,South China Morning Post, (21February2002).
91.‘Venice casino vision to rise over Macau’,Hong Kong iMail,(14February2002),p.A3.
92.Tyler Marshall,‘Developers bet on Macau as the next gambling capital’,Los Angeles Times,(19May2002).
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the STDM had a net pro?t of HK$760million,a drop of50%from the earnings in 1999and a?gure that saddened Stanley Ho.93On the other hand,the STDM entered into a war of words between Stanley Ho and his nephew Michael Mak Shun-ming, the son of younger sister Winnie Ho Yuen-kei.94Compounding the family feud was Ho’s deteriorating relationships with Henry Fok.Fok claimed that he was the largest shareholder in the STDM,which announced in a press conference in June2001that Ho was the biggest shareholder owning30%of the company.95According to the Eastweek Magazine,Fok held25%through a foundation in his own name and Cheng Yu-tong,the head of the New World Development,held10–12%.96In January2002, Fok remarked in public that he had received only HK$100million from the STDM’s pro?ts in2001,and that the company’s accounts‘had not been very clear’.97In December2000,the Macau Jockey Club(MJC),whose chairman is Stanley Ho, expressed its‘shock and surprise’at a vice raid on its Hong Kong clubhouse sauna where22people were arrested by the Hong Kong police.98The MJC’s business in Hong Kong was also dealt a blow in2001when the Hong Kong Government and the Legislative Council decided to ban Hong Kong punters from betting on Macau races.99Before its transformation into the SJM,the STDM had been marked by internal fragmentation,family feud and political strife.
In response to internal crises and external challenges,Ho named daughter Pansy Ho as the heir-apparent to inherit his casino empire,injecting new blood into the STDM’s managerial leadership.In March2000,a majority of the STDM’s shareholders agreed that Pansy Ho should join the Board of Directors.Stanley Ho’s sister Winnie Ho and another majority shareholder Henry Fok were absent.Fok sent a representative to the meeting.Winnie Ho expressed her opposition to Pansy’s admission to the Board:‘Please announce to all shareholders that I voted 93.He said:‘For the past37years,the worst!You know well enough the security was so bad.I could not say so during the Portuguese administration.But let’s be honest—horrible!’Keung Keung,‘Stanley Ho’,Hong Kong Standard,(24March2000),p.A12.
94.For details,see Shirley Lau,‘Stanley Ho?rm steps into fray as family rift deepens’,South China Morning Post, (8June2001).
95.Michael Wong,‘King of Gamblers holds lion’s share,say casino company’,Hong Kong iMail,(8April2001), p.A6.Another report said Fok had a27%stake in the STDM.See William Mellor,‘Stanley Ho’s secret weapon’,Asia Inc.11(3),(April2002),p.14.
96.Wong,‘King of Gamblers holds lion’s share’,p.A6.
97.‘Night for truce in casino feud’,Hong Kong iMail,(15February2002).Fok also said he had not inspected the STDM’s accounts for about40years and had not visited Macau for20years.He also mentioned that he received between HK$50million and HK$200million each year,but believed that his amount was less than Ho’s allocation to himself.According to Fok,‘He[Mr.Ho],of course,got more.In fact,the distribution of the company’s pro?ts is unreasonable’.See Joan Yip,‘Dynasty divided on pro?ts and shares’,Hong Kong iMail,(7June2001),p.A2. In February2002,Fok announced that he would sell his shares in the STDM and then use the proceeds to set up a charity foundation to help Macau develop its cultural and leisure activities.See‘Henry Fok to sell casino stake amid war of words’,Hong Kong iMail,(26February2002),p.A1;and Davide Dukcevich,‘Henry Fok wants a kinder, gentler Macau’,wysiwyg://36//https://www.doczj.com/doc/6514227167.html,/fo/020402/0402fok_1.html.
98.The Club spokesman said:‘The sauna is managed by our contractor...Its licensee and his staff are not Macau Jockey Club of?cials or staff.An internal investigation is being carried out.We will terminate the contract with them if the allegations are proved’.See Clifford Lo,‘Vice raid stuns Macau Jockey Club’,South China Morning Post, (16December2000).
99.Antoine So,‘Stanley Ho urges calm in betting row’,South China Morning Post,(11January2001).At the same time,https://www.doczj.com/doc/6514227167.html,—an internet casino managed by the STDM—tried to target the Hong Kong gamblers.But the Hong Kong Government was keen to amend the Gambling Ordinance in order to make it illegal for offshore bookmakers and gambling operations to take bets from Hong Kong people.See‘Ho exploits legal loopholes on bets’,Hong Kong iMail,(25May2001).
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ORGANIZED CRIME AND POLITICS IN MACAU against the company’s balance sheet,pro?t and loss account and the Board meeting report of2001.Please record the above-mentioned opinion in the minutes’.100Pansy Ho contributed to the STDM’s business revival in the mid-1990s as she negotiated a merger with a rival fast ferry company that operated the Hong Kong-Macau route,thus ending up with a joint venture where a71%stake is controlled by Shun Tak Holdings.101She admitted:‘Macau is sleazy.It must become family-friendly and conducive to corporate activity’.102Under her management,the STDM continued to demonstrate its commitment to Macau’s future,such as the construction of the Macau Tower Convention and Entertainment Center.103Although Stanley Ho lost his casino monopoly,he had rejuvenated his casino empire by promoting Pansy Ho,thereby trying to retain a competitive edge over the other two new rivals in the casino industry.104
Macau’s revamped casino industry raised the concern of some foreign governments, such as the American and the Australian governments,about cross-border organized crime,especially the proliferation of money laundering activities.The former United States Consul-General in Hong Kong,Michael Klosson,said:‘Based on our experience elsewhere in the world...,new gaming establishments could increase the amount of counterfeit US currency circulated in Macau’.105He further remarked that the American Government was determined to combat organized crime through‘training and wider contact with Macau law-enforcement authorities’.106As a matter of fact,money laundering had long been a phenomenon in Macau’s casinos where some corrupt mainland cadres and even members of Taiwan’s triads laundered their dirty money. While Ho’s casino monopoly was broken in order to install mutual checks and balances amongst the three winners,the post-colonial state in Macau is under tremendous pressure to improve its management of the casino https://www.doczj.com/doc/6514227167.html,munity leaders agree that Macau needs to launch tertiary-level commercial gaming courses to enhance professionalism in casino regulations and supervision.107Speci?cally,the University of Nevada’s gaming management course could serve as a model for Macau.The Macau Government’s Institute for Tourism Studies has the potential to become a training center for casino management,thus helping Macau adapt to the liberalization of the gaming industry.
100.‘Pansy in line to rule Ho empire’,Hong Kong iMail,(22March2002),p.A1.
101.Mellor,‘Stanley Ho’s secret weapon’,p.16.Shun Tak Holdings boasts the world’s largest jetfoil?eet.Pansy Ho graduated from Santa Clara University and her former boyfriend was Gilbert Yeung,the son of Albert Yeung (Stanley Ho’s business rival).She previously had a strained relationship with Stanley Ho’s fourth wife,Angela Leong On-kei.When the PRC President Jiang Zemin visited Macau in December200and asked‘women comrades’to join him in staging an impromptu sing-along,Stanley Ho encouraged his fourth wife to take the stage.See Stella Lee,‘Singing leader’s date with an angel’,South China Morning Post,(22December2000).It must be noted that Stanley Ho had once threatened to disinherit Pansy Ho when she was rumored to have plans to get married to Gilbert Yeung. See‘Pansy Ho joins STDM board’,Hong Kong iMail,(22March2002),p.A4.
102.Ibid.
103.Stanley Ho asserted that the Macau Tower was proof of the STDM’s continuing commitment to Macau’s future.See Harald Bruning,‘Stanley Ho hails opening of tower’,South China Morning Post,(20December2001). 104.Cathy Holcombe,‘Shun Tak wild card as Ho keeps on smiling’,South China Morning Post,(11February2002). 105.‘Macau“set to face in?ux of dirty money”’,Hong Kong iMail,(9May2002),p.A6.Also personal discussion with an Australian of?cial,2002.
106.‘Macau“set to face in?ux of dirty money”’,p.A6.Also see Associated Press,‘US of?cial:Vegas casinos in Macau will bring law enforcement challenges’,(8May2002).
107.Harald Bruning,‘Gambling graduates are the name of the game’,South China Morning Post,(22March2002).
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Conclusion:casino politics,organized crime and the post-colonial state
The authority and legitimacy of Macau’s colonial state were seriously challenged by organized crime that stemmed from the STDM’s administrative decentralization and mismanagement.Casino politics in Macau’s colonial era developed from Stanley Ho’s personal dominance to a fragmented scenario where new triad bosses emerged and undermined the STDM’s authority and https://www.doczj.com/doc/6514227167.html,anized crime became so uncontrollable in the colonial state that both the Portuguese administration and Macau’s sovereign state,the PRC,had to intervene for the sake of maintaining law and order shortly before the handover.
The post-colonial state in Macau has implemented reforms in the police force with a view to increasing its capacity in dealing with organized crime.On the other hand, casino politics remains complicated and fragmented with different group interests, but it has turned more peaceful than the situation during the?nal years of Portuguese rule.The sour relationships between Stanley Ho and Henry Fok,and the entry of two American casino capitalists into Macau’s gaming industry are testimony to the increasing complexities of Macau’s casino politics.What distinguishes casino politics in the post-colonial era from that in the?nal years of Portuguese governance is the currently low pro?le of triads.Since Macau’s handover,triads have not remained a political force challenging the post-colonial state and the dominant casino capitalists.The participation of the American casino capitalists in Macau’s gaming industry has instituted some checks and balances against Stanley Ho’s new company, which is forced by the rapidly changing circumstances to implement reforms for the sake of maintaining its competitiveness.
Since Macau’s handover,a self-strengthening movement on the part of the post-colonial state has accompanied the transformation of casino politics from violence to internal pluralism.Civil service reform,improved casino management,the PLA’s presence,and Beijing’s political support have altogether constituted powerful checks against the spread of organized crime.While the colonial state in Macau was marked by an alliance between corrupt bureaucrats and casino capitalists,the post-colonial state has been characterized by its relative autonomy vis-a`-vis all the casino capitalists.108The relative autonomy of the post-colonial state is conducive to the maintenance of law and order,for casino capitalists who may have potential and close relationships with triads can be tackled in a more impartial and determined manner.The dual alliance between the colonial state and casino capitalists became a history of the past.Having a degree of relative autonomy vis-a`-vis the casino capitalists,the post-colonial state in Macau possesses much stronger capacity to cope with organized crime than the Portuguese colonial state.While organized crime was an outcome of mismanagement on the part of the‘casino state’in the latter half of the1990s,it is no longer a thorny problem undermining the authority and legitimacy of the post-colonial state.Undoubtedly,the case study of Macau offers insights on the dynamics of the interrelationships between casino politics,organized crime and the role of the state.
https://www.doczj.com/doc/6514227167.html,paratively speaking,the post-colonial state in the Hong Kong Special Administrative Region has witnessed a decline in its relative autonomy vis-a`-vis the capitalist class.See Lo Shiu Hing,‘The Chief Executive and the business:a Marxist class perspective’,in Lau Siu-kai,ed.,The First Tung Chee-hwa Administration:The First Five Years of the Hong Kong Special Administrative Region(Hong Kong:The Chinese University Press,2002), pp.289–328.
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