Inside Asian Gaming

February 2011 | INSIDE ASIAN GAMING 23 tax from the expansion of gaming and tourism was an obvious choice given the long history of gaming in the territory. Under STDM’s monopoly, the annual number of visitors to Macau rose from half a million in 1961 to two million by 1973, then four million in 1983 and more than eight million in 1996. Since 2004, five more casino operators have joined the market alongside STDM’s successor, SJM. Four of them are foreign-owned or part foreign-owned (in the case of Melco Crown Entertainment and the joint venture between Pansy Ho and MGM Resorts International). In 2010, the number of annual tourist arrivals to Macau reached just under 25 million—fifty times the 1961 figure. And yet despite all the new infrastructure brought by outside investors, Macau still functions as a Ho family town and works to enrich that clan, their associates and allies. Most of us arrive on a Shun Tak-operated ferry at an STDM ferry terminal. Or we land at an STDM-owned helicopter terminal, or fly in to a 33% STDM-owned airport, possibly on a 14% STDM- owned Air Macau jet. Some of us stay at an STDM hotel (with or without casino). A few of us may live in STDM or Shun Tak- developed housing developments. A handful of us may one day have our ashes laid to rest in a columbarium Shun Tak plans to build in the territory. It seems that even in death, there’s no escaping the influence of the Ho family’s business ties in Macau. A question is, can the Ho family take advantage of the political goodwill on offer from Beijing and build on Stanley Ho’s legacy, or will they turn inward and devour each other? Ferry tale beginning—most visitors to Macau arrive on Ho family-owned transport The Ho family’s influence in Macau extends even beyond the grave currency and so the cycle continued. In those days before electronic banking and electronic surveillance, covering up the money trail hardly mattered. In any case, the Portuguese administration in Macau was hardly likely at that time to be a cheerleader for sanctions enforcement. It was weak locally and distracted by internal political problems back in Portugal, and thus primarily interested in avoiding unrest and having peaceful relations with China. Neighbourly cooperation By the late 1950s and early1960s, the needs of the Chinese economy had outgrown that early barter system. It was in this era that many banks were set up in Macau specifically for the purpose of doing business with China. It’s no accident that many of the most prominent families in Macau and those with the best political connections to Beijing are the founders of, owners of, or shareholders in, those local banks. The spat between China and the US administration of George W. Bush back in 2005 over the Macau bank Banco Delta Asia and its dealings with North Korea is just a modern extension of Macau’s decades-long tradition of helping its beleaguered communist neighbours in the face of what has often been perceived historically to beWestern economic and political aggression. Those with a more cynical turn of mind suggest the modernisation of the Macau gaming industry in 1962 was due to pressure from China. The argument goes that as the mainland Chinese economy grew, it needed access to an efficient, and more importantly, biddable money laundering service on its doorstep for the purposes of covert external trade. Macau fitted the bill perfectly. Macau’s expanded and modernised casino system—regulated, but not overly so, and able to swallow up and process large amounts of cash via VIP gaming, was the perfect washing machine for Chinese cash according to the cynics’narrative. IAG has seen no hard evidence to support that claim. Perhaps a more likely explanation is that in the early 1960s a cash-strapped Portugal was urgently looking for fresh ways to make its sprawling but creaky empire self-financing. Raising Despite all the new infrastructure brought by outside investors, Macau still functions as a Ho family town and works to enrich that clan, their associates and allies. SJM Succession Succession race—Macau Grand Prix—one of the many local attractions developed under the reign of Stanley Ho