What happened to global gambling capital Macau while its most infamous gangster was in prison
Night lights in front of the five-star Wynn Hotel in Macau, China. Kashmut / Flickr.com
A Triad member meets the one-two punch of Chinese authority and Vegas entrepreneurialism in the world’s largest gaming destination.
The Macau gangster known as “Broken Tooth,” once accused of planning to kill the police chief of the city that turned into the world’s biggest casino hub, was released after more than 14 years in prison.
Wan Kuok-koi was convicted of loan sharking and triad membership in 1999, a year after he was arrested for an investigation into a car bomb attack on then police chief Antonio Marques Baptista. He was freed around 7 a.m. local time today, Stephen Fok, Macau Prison’s media relations officer, said in a telephone interview.
During Wan’s time in jail, Macau’s annual casino revenue surged to 268 billion patacas ($34 billion), more than five times that of the Las Vegas Strip, boosted by the entry of foreign players including Las Vegas Sands Corp. and Wynn Resorts Ltd. The U.S. operators will probably stay away from Wan should he return to running a junket operator, which brings high-stakes gamblers to casinos, said Gabriel Chan, an analyst at Credit Suisse Group.
“They will be under greater scrutiny and closely watched given his high profile,” said Chan, who expects Macau casino revenue to grow to as much as $38 billion this year, before Wan’s release. “There’s too much money at stake. If I were another junket, I’d do my best to stop him messing things up.”
A week before Wan’s release, one of his former lieutenants was arrested, the Macau Daily Times reported.
“The arrest of Broken Tooth’s former right-hand man can be seen as one of the pre-emptive measures taken by the police,” said Grant Govertsen, a Macau-based analyst at Union Gaming Group. “They want to send a clear message.”
Wan, who was 43 when jailed, walked out of Coloane Prison, on an island with the same name, into a transformed city.
In the late 1990s, Macau, still administered by Portugal, was the scene of “triad wars,” with Wan claiming in 1998 that his gang had 10,000 members, according to the book “The Politics of Cross-Border Crime in Greater China” by Sonny Shiu- Hing Lo.
According to an Economist report in May 1998, the violence was so widespread that Macau’s then security chief Manuel Monge told tourists that “the hitmen never missed their mark” and they wouldn’t hit innocent bystanders.
A month after Wan’s conviction, the territory returned to Chinese rule. Since then, Macau’s per-capita gross domestic product more than quadrupled to about $66,000 last year. The number of crimes related to organized criminal gangs fell to 15 last year from 81 in 2000.
Billionaire Stanley Ho’s casino monopoly used to lure bettors into smoke-filled gambling halls with fading paint and worn carpets, with prostitutes and loan sharks patrolling the entrances. Now, U.S., Australian and Hong Kong players compete with Ho to draw gamblers into lavish casinos that combine malls with conference venues.
Casino moguls Sheldon Adelson’s Sands and Steve Wynn’s namesake company, together with Galaxy Entertainment Group Ltd., Melco Crown Entertainment Ltd. and MGM China Holdings Ltd., have invested more than $15 billion in the city since the government ended the 40-year gaming monopoly held by Ho in 2002. All of these five casino operators and Ho’s SJM Holdings Ltd. plan to expand in Macau.
Sands China Ltd. contributed more than half of the $9.4 billion revenue last year of Adelson’s Las Vegas-based company. The Hong Kong-listed unit has gained 51 percent this year, closing at HK$33.05 yesterday, more than triple its 2009 initial public offering price.
Wynn Macau Ltd. accounted for more than 70 percent of Wynn Resorts’ $5.3 billion revenue in 2011, according to data compiled by Bloomberg. All six Hong Kong-listed Macau casino companies have gained this year, with Galaxy more than doubling in value.
Trouble flared in Macau in August with raids at casino and hotels. Almost 1,300 people were questioned and about 150 detained after a series of attacks and murders, including the beating of Ng Man-sun, the biggest shareholder of junket operator Amax Holdings Ltd.
Ng, also known as “Street Market Wai,” was attacked by six men who beat him with hammers and sticks while avoiding hitting him in the head, the New York Times reported in June. Porda Havas, a public relations company hired by Amax, said the company wouldn’t comment before Wan’s release.
Wan may try to go back to providing services and loans to VIP gamblers, who bet as much as the legal limit of 250,000 patacas a hand, said Victor Yip, a Hong Kong-based analyst at UOB Kay Hian Ltd.
“There are concerns within the gaming industry because he used to be so influential,” said Yip. Still, the industry “is big enough for an additional player,” he said.
Junket operators provide “crucial intermediary services” as they identify potential high-rollers, offer them credit and collect gambling debts, said Steve Vickers, a former Commander of the Royal Hong Kong Police’s Criminal Intelligence Bureau.
High-stakes gamblers from China turn to junket operators because currency controls limit the amount of cash they can take out of China to 20,000 yuan a day. High rollers provide Macau with more than two-thirds of its casino revenue.
Triads were involved in loansharking, kidnapping, extortion and illegal gambling, according to the biography of Vasco Rocha Vieira, Macau’s last governor. Gang members had infiltrated the police force and on Baptista’s first day as chief on Nov. 30, 1995, two bombs exploded at the entrance of the police headquarters, it said.
“During the period of violence in the run-up to Macau’s handover, the triads chose their targets so as to get maximum media exposure,” Joao Severino, director of newspaper Macau Hoje from 1995 to 2002, said by phone from Lisbon, Portugal.
Sometimes they would set dozens of cars or motorcycles on fire, Severino said.
“I don’t anticipate a return of Macau’s violent past, as Macau casinos are growing and the pie is getting bigger,” said Au Kam-san, a lawmaker who grew up in the city. “The Chinese government has made it clear that it wants stability in Macau. It can take away everything it granted if these guys don’t behave.”
Katharine Liu, spokeswoman of Wynn Macau, Melina Leong, spokeswoman of Sands China, Sidney Luk, the director of investor relations at MGM China, and Yoko Ku a spokeswoman for Galaxy, all declined to comment ahead of Wan’s release.
Maggie Ma, a spokeswoman for Melco Crown and Janet Wong, a spokeswoman for SJM, didn’t return phone calls or e-mails.
“Wan Kuok-Koi is yesterday’s man,” said Vickers, who runs Steve Vickers and Associates, a Hong Kong-based risk consultant. “Whilst he remains connected with his previous gang members, there is just no room for the ‘wild bunch’ in Macau anymore.”
With assistance from Henrique Almeida in Lisbon. Editors: Frank Longid and Hwee Ann Tan.
To contact the reporters on this story: Vinicy Chan in Hong Kong at firstname.lastname@example.org and Bei Hu in Hong Kong at email@example.com. To contact the editor responsible for this story: Stephanie Wong at firstname.lastname@example.org.