With little fanfare, China is sending an official with a “tough cop” reputation to be its top man in Macau, the world’s biggest gambling hub, as Beijing puts tackling corruption center stage.
The deputy director of the Liaison Office of the Central People’s Government in Macau, Li Gang (李剛), a veteran of handling contentious issues in Hong Kong, is slated to take control of China’s liaison office in the former Portuguese colony this year.
The office has deepened its ties with casino and junket operators, who helped bring in more than two-thirds of Macau’s US$38 billion in revenue last year.
The low-key, but significant moves signal a deliberate attempt by China to be more directly involved in the oversight of Macau, which has drawn unwanted attention with reports of Chinese officials laundering state funds and betting millions in the casinos’ high-roller VIP rooms.
Rather than signaling a crackdown on Macau’s lucrative gambling industry, casino executives say the target is those Chinese officials using public money or pledging state assets to gamble — money that could otherwise be invested in businesses.
For example, then-Agricultural Bank of China vice president Yang Kun (楊琨) owed Macau casinos 3 billion yuan (US$490 million) in gambling debts, while local media have reported former Chongqing Chinese Communist Party (CCP) boss Bo Xilai (薄熙來) laundered money through Macau. There has been no official ruling on either case.
“They are taking a much more proactive role. The Chinese government is more concerned about assets being wasted,” said a senior executive at a Macau casino, who did not want to be named. “For them, it’s not about the funds being gambled, but about businesses or factories being squandered.”
China has revamped its anti-money laundering rules, while Macau is overhauling its laws to set more explicit requirements to detect suspicious transactions.
Macau Secretary for Economy and Finance Francis Tam (譚伯源) has said there will be stricter oversight of the gaming industry, with the government paying closer attention to abnormal capital flows.
Suspicious transaction reports in Macau rose by almost a fifth last year to 1,840, and more than 70 percent of those were related to the gaming industry, according to Macau’s Financial Intelligence Office.
Li, who sits on the CCP’s Central Commission for Discipline Inspection, was appointed deputy director of the Macau liaison office in December last year, and political analysts expect him to be China’s main representative later this year, when the current director is due to retire.
Having won plaudits for his firm handling of elections and electoral reform in Hong Kong as deputy director, Li has been quoted by local media as saying anti-corruption efforts are in line with a broader effort to tackle graft and the illicit outflow of funds, rather than a crackdown on Macau’s gaming industry.
After the release of notorious mobster Wan “Broken Tooth” Kuok-koi (尹國駒) in December last year, representatives from the liaison office informed casino operators that if they faced any trouble, they should go directly to them.
Under Portuguese control, VIP junket operators like Wan tended to take matters into their own hands, resulting in frequent and bloody violence in the 1990s.
Macau junkets are companies or individuals authorized to issue credit to gamblers and settle any subsequent debts. The biggest ones run multi-billion dollar operations.