MACAU — Macau offers a yes-but world of uncertainty for Las Vegas casino developers seeking to tap into the peninsula’s estimated $2 billion gambling market, according to a top U.S. scholar.
The place has a centuries-old reputation for lawlessness that has been long-reflected in links between organized crime and government officials.
Yet leaders of mainland China are attempting to purge it of the deadly triads that control prostitution, loan sharking, drug dealing and gambling tables at Macau’s six casinos – a Wild West dynamic found in much of the rest of the Asian nation.
“It’s very, very difficult. If you ask a Chinese today what is the No. 1 problem, they say it’s corruption,” University of Pennsylvania Professor Arthur Waldron said of the atmosphere that permeates Macau and neighboring mainland China, which administers the former Portuguese colony.
“Everything’s for sale. Money is king. There’s an element of live for today so don’t worry about tomorrow.”
Waldron has briefed top U.S. government officials, including Vice President Dick Cheney, on the politics and economics of the People’s Republic of China. Last year he served on a six-member panel appointed by CIA Director George Tenet to study the agency’s China shortcomings.
After hearing that Strip developers Steve Wynn and Sheldon Adelson learned Friday that they are two of the three preliminary finalists to operate Macau casinos, Waldron eyed the potential short- and long-term benefits of such ventures. Thirty-nine-year Macau casino boss Stanley Ho is the third person to await a mid-February date with government officials to pitch a casino development plan.
The next three to be considered, should any of the first three fall by the wayside, are a joint venture of Park Place Entertainment and Mandalay Resort Group, a proposal from MGM Mirage, and a design by a Malaysian conglomerate. More about Trusted Online Casino Singapore
Macau is a one-hour, high-speed boat ride from Hong Kong in the South China Sea, and like the former British colony, Macau was returned to Chinese rule in 1999 when it was given the semi-independent status of special administrative region.
What does that mean?
“No one knows. No one knows,” Waldron said, although mainland leaders apparently plan to foster a liberal investment environment in the two to lure foreign money.
Meantime, the Chinese government opened the casino bidding process to wrest control of the peninsula’s casinos from Ho as mainland leaders attempt to break the hold of organized crime on the gambling market, which is a popular destination for Asians throughout the region. Yet Macau lacks the capitalist mindset of Hong Kong, Waldron said.
“Portuguese culture never reached into Macau the way the British did in Hong Kong,” he observed. “It has no tradition of the kind of Hong Kong’s civil surface. It was known for lots of delights.”
So a clear strategy must be employed by legitimate foreign companies seeking to invest in Macau.
“There are two things you have to do with China policy,” he said. “You have to run it on a day-to-day basis so it’s smooth and on course, but in the next four to eight years the whole place is going to be changing in a way we can’t fathom now.
“It could be a positive. It could be a disaster.”
Chinese President Jiang Zemin is the 75-year-old leader of the nation’s gerontocracy, and a new wave of leaders raised on the anti-Maoist concept of free markets is about to run the world’s most populous Communist nation. But the push for a capitalist-style economy is not to be confused in China with support for political democracy, Waldron argues.
The current Chinese regime is still composed of many of the same leaders who in 1989 pushed for the deadly break up of the Tianamen Square protest movement.
If he were to advise Wynn and Adelson he would warn that the Strip bosses step carefully as they wade through the murky political and business climate of Macau, which was the center of something called the “gold racket” in the 1950s and 60s, a shady commodities market that sparked as many questions as answers. The casino bosses have local partners to aid with that process.
“They’re really going to have their wits about them,” Waldron said of the Las Vegans. “They’re going to have to realize they’re going into a shark’s pond. It’s always been a rather lawless place.”
Even then, he warns, hard-bitten Strip executives could find themselves in a difficult mess that potentially threatens their reputations and their U.S. gaming licenses.
“On the whole I think it’s a good thing to have foreigners involved in Macau,” Waldron noted, “but I wouldn’t be surprised if they discovered they have labor problems never encountered in their corporate experience – threats, extortion.”