From Casino Wars to Casino Capitalism: Sovereignty and Gaming in Macau
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Number 46 February 2019 Center for Gaming Research Occasional Paper Series University Libraries University of Nevada, Las Vegas From Casino Wars to Casino Capitalism: Sovereignty and Gaming in Macau Tim Simpson ABSTRACT: In 1999, after nearly half a millennia of administration, Portugal returned the city- state of Macau to the People’s Republic of China, and it was designated a Special Administrative Region under the PRC’s “one country, two systems” regime. Less than a decade after the hando- ver Macau was transformed into the world’s most lucrative site of casino gaming, and today the city is visited by more than 35 million annual tourists, the majority of whom are from mainland China. Macau’s remarkable economic expansion may be in part attributed to the city’s ambiguous sovereignty, an endemic characteristic which dates to the city’s founding in 1557, and which has long been its most advantageous asset. In this paper I analyze a three-year wave of violent crime, known colloquially as the Casino Wars, which was attributed to Chinese organized crime groups and which plagued Macau’s casino gaming industry in the period just prior to the handover. I seek to understand the relevance of the Casino Wars for the city’s status today as a special Chinese ter- ritory, and the way in which that exceptional semi-sovereign status allows Macau to function as a site of governmental policy innovation and experimentation with specific relevance for China’s ongoing market reforms. Keywords: Macau; sovereignty; triads; Chinese tourism; state-transnational network; model exper- iment Preferred Citation: Tim Simpson. “From Casino Wars to Casino Capitalism: Sovereignty and Gam- ing in Macau.” Occasional Paper Series, 46. Las Vegas: Center for Gaming Research, UNLV Univer- sity Libraries, 2019. A February 26, 1998 Wall Street Journal article three-year wave of violent crime which riveted regional about the Portuguese territory of Macau, which was attention involved members of local Chinese triads, or published at the height of the city’s era of gangland criminal brotherhoods, who fought one another, and violence which came to be known as the Casino Wars, even targeted government leaders and gaming industry vividly described the tiny colony as “perhaps the most officials, on Macau’s streets and inside the city’s casinos. lawless six square miles on earth” (Morrison, 2008). The The Wall Street Journal’s intrepid correspondent ©2019 Center for Gaming Research University Libraries • University of Nevada, Las Vegas Center for Gaming Research • University of Nevada, Las Vegas SImpson • From Casino Wars to Casino Capitalism recounted Macau’s “decadent atmosphere”, which she its remarkable contemporary economic ascendance the Middle Kingdom, and Macau played a crucial role in the sort of dual allegiances typical of medieval cities claimed was “redolent of ‘Casablanca’”; and explained as exemplary of Macau’s sui generis regime of “casino the emergence of the global capitalist system in the 15th (Alsayyad and Roy, 2006; Henders, 2001). In her book that the city’s “major industries, legalized gambling capitalism,” a particular mode of governance and and 16th centuries. As a port community in Portugal’s Sovereignty at the Edge: Macau and the Question of and prostitution, spawn other pursuits such as money development which was enabled by the city’s return to formidable and far-reaching global empire, Macau was Chineseness, anthropologist Cathryn Clayton (2010) laundering, extortion, drugs, and violence” which the PRC. The transformation of Macau into a global unique among Portuguese settlements for two reasons. refers to this defining characteristic as the city’s “sort- had granted Macau its seemingly ungovernable status gaming hub is intimately and intricately related to the First, in such strategic sites of trade as Calicut, Goa, and of sovereignty”. “The details surrounding the earliest (Morrison, 2008). ongoing transformation of China into what is perhaps Malacca, the Portuguese tended to take over, occupy, Portuguese settlement in Macau are lost, or, more The article appeared just one and a half years before the world’s most dynamic market economy, and today and exploit already existing ports. But Macau was the likely, were never recorded,” notes Clayton. “To many Portugal’s scheduled return of Macau to the People’s Macau plays a fundamental role in the country’s only Asian city which the Portuguese essentially created historians, the haziness of this origin story is the origin Republic of China (PRC) in December 1999, and the economic order. in a foreign land (Gipouloux, 2011: 118). Although at of Macau’s sovereignty problem. To others, this haziness description of the disorder created by Macau’s “rival Macau is often called “Asia’s Las Vegas”, and we will see first it was merely a small settlement, in 1586 the viceroy was the condition of possibility for the very existence of crime syndicates battling for control of the rackets” that the city’s recent gaming explosion has indeed been of Portuguese India granted Macau the formal status of Macau” (41). raised questions about the consequences of the pending driven, at least in part, by the local industry participation a city. The bestowal of city status on the territory had As the city’s importance to global trade eventually handover of sovereignty for the city’s basic law and of Las Vegas entrepreneurs such as Sheldon Adelson the benefit of granting Macau’s European residents a waned along with Portugal’s global influence, Portuguese order. A subsequent article entitled “Mayhem in Macau” and Steve Wynn. But to understand the recent global relatively high amount of autonomy in self-governance officials in Macau sought to exploit the city’s ambiguous which was published in the same newspaper several ascendancy of Macau’s gaming business we must look in regards to their relations to the Crown (Clayton, 2009: sovereignty for a variety of marginal economic activities. months later suggested: beyond the city’s contemporary North American casino 42), and also uniquely positioned them in relation to When China ceded Hong Kong to Britain in the wake of The mayhem is so bad that unlike people in near- counterpart, and instead peer back half a millennia to Chinese officials. Macau’s nascent economy benefitted the Opium Wars, Portugal attempted to emulate Britain’s by Hong Kong, who reluctantly returned to Chinese contemplate Macau’s formative origins as a European from the city’s role as a medium of interchange between role in that city and asserted formal colonial control sovereignty last July, many Macau residents can’t wait colonial outpost at the outset of the modern era. Europe and the Ming dynasty, as well as trade between over Macau, legalizing opium production, prostitution, for the mainland to take over. They want someone to A key condition of Macau’s transformation is China and Japan, which was forbidden by imperial gambling, and indentured servitude (Asome, 2014). clean up the lawlessness. But China has promised to the city’s unique form of sovereignty, an ambiguous edict. For a century Macau was a crucial trading site Macau’s protean sovereign status endured several maintain Macau’s way of life, just as it did with Hong characteristic which has long served as Macau’s greatest on the maritime routes which linked Antwerp, Lisbon, transformations over the next century. When the Kong, and there are no specific plans for curbing the gangsters. (Brady, 2008) asset. To illustrate this condition I will briefly explore Goa, Malacca, Siam, and Nagasaki. United Nations pressured member states to decolonize three interrelated topics. First, I will discuss Macau’s Macau’s second unique characteristic is that after World War 2, Portugal’s Prime Minister Antonio However, despite such grave concerns about triad unique sovereign status as it has developed over the throughout its 500 year history, the city’s specific political Salazar resisted this pressure and endeavored to retain influence and Macau’s future prospects under Chinese past half a millennia. Second, I will recount the events status has been ambiguous. When the Portuguese first the country’s extensive overseas possessions in Asia and rule, only two decades later the International Monetary of the Casino Wars which unfolded in the final years of settled in Macau, China did not formally yield power to Africa. In 1951, through diplomatic sleight of hand, Fund declared in its 2018 Economic Outlook Update Portuguese rule, and which called attention to Macau’s the Europeans, and there was no formal designation of Portugal revised its constitution and redefined Macau that the now semi-autonomous Chinese “Special unconventional sovereign status. Finally, I will reflect on the specific size or boundaries of the territory (Breitung, as an “overseas province” of the country, a paradoxical Administrative Region” (SAR) of Macau was the world’s how the violent disruption of the Casino Wars enabled 2007: 33). No existing historical records document the delineation which declared Macau to be both part of second wealthiest territory as measured by per capita the PRC, in the contemporaneous post-colonial and exact administrative agreement concerning Macau the nation’s sovereign territory and simultaneously GDP. The IMF confidently predicted that by 2020 Macau post-socialist periods, to indirectly cooperate with that was forged between the Chinese and Portuguese, not a part of that territory. When a leftist coup finally would overtake Qatar to become the richest place on transnational gaming figures such as Adelson and and the territory did not clearly belong exclusively overthrew the Portuguese dictatorship of Marcelo earth (Fraser, 2018). Wynn to exploit Macau’s peculiar sovereignty for the to one or the other power. Historian K.C. Fok (1999) Caetano in the Carnation Revolution of 1974, Portugal Macau’s unlikely and meteoric rise from seedy purposes of economic development.