Casinos will be China’s cesspools

By Pan Han-shen 潘翰聲  / 

Thu, Feb 21, 2013 - Page 8

Weidner Resorts Taiwan has released a plan to build a casino resort on Matsu — the small island chain just 16km off the coast of China’s Fuzhou City — catering to people on both sides of the Taiwan Strait, and Hon Hai Group chairman Terry Gou (郭台銘) has proposed a special casino area in New Taipei City’s (新北市) Tamsui District (淡水) to boost the economy.

Gambling-centered tourism could be the last bubble of the Chinese economy, and Taiwanese should ask themselves whether the nation can handle the stakes involved in the bet being wagered by the governments and large corporations in China and Taiwan in setting up a Chinese offshore money laundering zone.

Liberalization and globalization since the 1980s have resulted in deregulation and increasing disregard for morality in public policy. Once the tech and real-estate bubbles burst, multinational corporations have been moving further into the black economy in pursuit of profit, blurring the line between what is legal and what is not.

Turning gambling into a form of tourism is akin to sugarcoating poison.

Local governments are only interested in the immediate benefits and are unwilling to shoulder responsibility for the negative consequences that could result from projects, under-the-table dealings or the reality that these casinos are often impossible to pull off.

Empirical studies from the US show that crime rates are much higher in states where gambling is allowed, and while local governments enjoy increased tax revenue and improved accounts, the concomitant negative social costs make these benefits small compared with the damage caused by gambling.

Such studies also show that many residents in autonomous regions for indigenous peoples have remained poor after casinos have been set up in their homelands.

Many supporters of the gaming industry cite Singapore, but they overlook that Singapore has a high level of social control and a relatively low emphasis on human rights and democracy. Add that information from Singapore may not be transparent, and there is a high possibility that these supporters are overestimating the profits and underestimating the costs of the development of gaming industries.

Most political hacks promoting gambling in Taiwan are members of local governments who have proved themselves politically incompetent. Such people have done nothing to improve standards of living in their local areas and are now saying that casinos will fix these problems.

During the political tug-of-war over gambling that has been going on in the legislature for the past decade, the tacit understanding has been to use the Offshore Islands Development Act (離島建設條例) to open a small window for gambling and then, once a gambling referendum is passed, set up a special gambling act which would open up gambling on Taiwan.

Taiwanese like to gamble and despite the government having established a national lottery, illegal casinos abound.

Illegal gambling will not stop with the establishment of a special gambling zone and even if the government were to prevent Taiwanese nationals from entering the casinos, many have more than one passport. However, the main target for the casinos will be Chinese citizens.

Large amounts of dirty money have been circulating in China over the two decades since it opened up and reformed its economy.

It is not difficult to understand why Hong Kong opened up unregulated travel for Chinese tourists and why markets for diamonds, precious metals and luxury items have been so strong.

China’s neighbors have also seen the huge financial profits made by providing outlets for money laundering. Malaysia, Singapore, the Philippines, Macao and Jeju Island in South Korea have been falling over themselves to establish large casinos, with Vladivostok in Russia looking to do the same. They have all focused on the wealthy Chinese minority.

Casino resorts need to look like healthy places suitable for families, otherwise seemingly well-to-do bigwigs will not use them to launder their dirty money.

Therefore, while it may seem like China is letting its neighbors reap the benefits of economic growth by not establishing legal casinos within its own borders, it is really using them as cesspools.

If morals are put aside and the proposed gambling zones are looked at closely, the nation will have to concede benefits to China while taking on the stress of management and cope with the resulting negative consequences and social costs.

This is a disadvantageous and absurd situation for Taiwan. Matsu, given its small size and limitations caused by a lack of water and power resources, will also be unable to develop a strong gaming industry.

The gambling industry is part of the “black economy.” Money laundering and violence resulting from organized crime will always be problems in such an environment.

It is ironic in a historical sense that Matsu, a place that was once the frontline in the battle between Taiwan and China, can now be viewed as a place where money will be made with historical grievances thrown out the window.

Finally, the nation may end up being used as a place to launder dirty Chinese money, which is a potential threat to the governments of both sides of the Taiwan Strait and is something civil society should stand united against.

Pan Han-shen is a central executive committee member of the Green Party Taiwan.

Translated by Drew Cameron