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Beijing's Losing Hand

China is cracking down on casinos and asking its neighbors to do the same. But in a nation of born bettors, the bid gets long odds.

April 13, 2005|Mark Magnier | Times Staff Writer

Many people are drawn to Ruili, a classic border town where anything goes, because no one asks too many questions. Little more than a road and a few huts when modern China emerged in 1949, it was built up by soldiers to safeguard the country's southern flank. Much of the town doesn't get moving until late afternoon, when restaurants, massage parlors and teahouses come to life and then remain open until the early-morning hours.

Zhao Renzhong, 67, a retired soldier living in Ruili, said all but a few of the 20 or so local casinos had been closed in the crackdown. "But as soon as the government crackdown eases, they'll reopen," added his friend Wang Yonghua, 51, who runs a small shop selling cigarettes and baijiu, a clear liquor.

Wang isn't the only one skeptical of the government's latest push. "We call these campaigns a 'gust of wind,' " said Zhou Xiao- zheng, a sociologist with People's University in Beijing. "It blows the dust away, but as soon as the wind stops, the dust comes back. The central government aim of halting gambling is totally unrealistic."

One glaring exception to Beijing's "people's war" campaign is Macao, a longtime Portuguese colony that reverted to Chinese rule in 1999. Even as China has cracked down hard on other areas within its reach, it has allowed Macao to aggressively expand its gaming industry.

Gambling has been legal in the territory since 1847, and Beijing apparently sees it as a way to bolster the local economy. With more Chinese traveling, Macao is enjoying a flood of mainland gamblers, setting it on course this year to surpass Las Vegas as the world's largest gambling market.

Although Macao is said to report suspicious gamblers to Beijing, its casinos have been a destination of choice for legions of corrupt officials.

The party has been stung by a recent string of highly embarrassing gambling sprees by those in power. Party officials in Sichuan province were found gambling during work hours in teahouses, and presidents of state-owned companies squandered $1.5 million in taxpayer money at the tables in Macao and Myanmar. The final straw may have been the case of Cai Haowen, 41, a mid-level transport official from the northeastern province of Jilin. He disappeared late last year after allegedly absconding with $330,000 in public money and losing it all during 27 trips to a North Korean casino. Police found and arrested him in early February.

"Common people have a very strong reaction to this, wondering how they can be gambling when we don't have enough to eat," said Zhou, the sociologist. "It would be less damaging if it were in China, but to be losing our money to North Korean leader Kim Jong Il is ridiculous."

China's gambling ban has created opportunity in neighboring countries, with more than 200 casinos cropping up in recent years just over the border in North Korea, Myanmar, Vietnam, Laos and Russia. Often, these establishments admit only Chinese. Many reportedly are owned by Chinese and even receive power and water from China.

China's official media report that Beijing recently has managed to have nearly half these casinos closed at least temporarily by exerting political pressure, restricting the ability of customers to cross the border and even, in some cases, cutting off utilities.

As with many things in China, however, casinos with good connections have managed to stay open, even benefiting as their competitors are shuttered. Just 300 feet over Ruili's border with Myanmar, the massive Yong He Hotel and casino complex is doing a brisk trade.

"Would you like to go to Myanmar?" a smiling Chinese soldier asked as she guarded the border near the "Union of Myanmar, Silver Elephant Immigration Gate."

Visas, even temporary passports, are available, no questions asked, for $30 to $40 from people who have good guanxi with local officials. For those who can't be bothered with formalities, taxi drivers helpfully point out well-worn breaks in the yellow-and-green fence separating the countries.

China has watched legal casinos as far away as Las Vegas and Atlantic City siphon off its national wealth. With so much money on the table, even conservative countries such as Singapore are considering casinos, joining Australia, the Philippines and South Korea in aggressively courting Chinese gamblers. Particularly attractive are the "whales," high-stakes players who may drop $100,000 on a single bet.

Researchers at the Chinese Center for Lottery Studies at Peking University estimate that Chinese lost $72 billion gambling overseas last year, up from $48 billion in 1997. By some accounts, eight out of 10 Chinese tourists to neighboring countries gamble.

With all that money leaving the country, and questions about the long-term effectiveness of gambling bans, academics have called for study into eventually legalizing the industry under careful supervision.

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