Macau casinos and organised crime

Publication Date01 Oct 2004
AuthorAngela Veng Mei Leong
SubjectAccounting & finance
Journal of Money Laundering Control Ð Vol. 7 No. 4
Macau Casinos and Organised Crime
Angela Veng Mei Leong
Under Portuguese rule, gaming has been legalised in
Macau since 1847 and this small former Asian overseas
province of Portugal
has become known worldwide
as the `Monte Carlo of the Orient'. The ®rst casino
monopoly franchise was granted to Tai Xing Com-
pany in 1937, but it was too conservative to exploit
the full potential of the industry and only Chinese
games were played in the casinos. In 1962, the govern-
ment granted the Sociedade de Turismo e Diversoes de
Macau (STDM)
the monopoly rights to all forms of
gambling. The exclusive gambling franchise of the
STDM was extended in 1986 to 2001. Today, there
are three gaming licensees, namely Sociedade do Jogos
de Macau (a subsidiary of STDM), Wynn Resorts
and Galaxy Casino. The Macau Special Administra-
tive Region (SAR) government aims to turn Macau
into an attractive tourist spot with Las Vegas-style
mega-casino resorts. The number of visitors rose
from 500,000 in 1961 to more than 10 million in
2001. In 2002, there were on average 30,000 visitors
per day. With the huge revenue from gambling,
Macau is able to maintain a free port status, invest in
and adopt a low taxation policy.
Thus Macau, like Nevada, has `built government
around the gaming industry'
and could be called a
`Casino state'.
The STDM observed the rules of the game and ran
as the sole operator under the exclusive franchise
during the 1960s and 1970s. This centralisation of
ownership seems to be a good way of running a gam-
bling business in a small place like Macau. Owing to
increasing competition from newly opened casinos
in nearby areas like Thailand, Myanmar and Korea,
and ¯oating casinos in adjacent seas, however, there
was a need for the STDM to reduce the administrative
and marketing costs while attracting more customers.
Thus, the STDM began to change their way of doing
business through informal arrangement of gambling
in which the `dead' chips system
and the
`bate-®cha business'
became established in 1984.
According to Chin's study on Chinese Subculture and
most Chinese agreed that there were
gang members or triads
in their societies controlling
dierent illegal business. `Few Chinese deny that gang
members are active in their communities. The gangs
are involved in extortion, robbery, and the protection
of gambling places. Community residents are also
aware that certain tong members play an important
role in the operation of gambling establishments.'
Compared with other aspects of crime, however,
there is relatively less research done on casinos and
crime, especially Chinese organised crime or triads
in the legalised gaming business. Empirical studies
on organised crime or triads are quite dicult and
quantitative methods are usually invalid because it is
not easy to identify the triad members as they have
secret symbols and rituals; thus, it is often hard to
estimate the size of triad membership. The Societies
Ordinance Cap 151
in Hong Kong includes a series
of criminal oences relating to the operation of a
triad society, triad membership and recruitment.
Most triad societies will not keep a full set of records
of their rituals or members because this would
become evidence in court. Chin
claimed that the
most dicult task in his research was data collection
because systematic and reliable crime statistics or
comprehensive and scienti®c reports on Chinese
crime groups were rare. Besides, Chinese immigrants,
especially groups that felt vulnerable in overseas
enclaves, were reluctant to discuss the active crime
groups in their communities because they believed
that it was a very sensitive topic and might endanger
their safety. Thus Chin's study relied on four types
of source: interviews, observation ®eldnotes, ocial
reports and documents, and newspapers and maga-
zines. Morgan's
work in 1960 was largely based
on interviews with senior triad ocials. The data of
Chu's study on The Triads as Business
was also col-
lected through interviews and secondary sources.
The methodology adopted in this research includes
secondary sources, in-depth interviews and ®eld
observations. Secondary sources, including archives,
newspapers and magazine articles, law enforcement
agency ®les, court records, ocial crime statistics
and the government gazette (Boletim O®cial de
Macau), are reviewed. There are limitations in using
secondary sources, however; for example, the media
coverage may be biased and less reliable since the
Page 298
Journalof Money Laundering Control
Vol.7, No. 4, 2004, pp. 298± 307
#HenryStewart Publications

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