Macau: Gambling, Corruption, Prostitution, and Fake Worlds

As I mentioned in my previous post, Macau has different faces and identities: there is the old Macau, full of colonial buildings and in which the pace of life seems to resemble a relaxed Mediterranean town rather than a bustling, hectic Chinese city, such as Hong Kong or Shanghai. On the other hand, there is the Macau of gambling, of gigantic hotel and casino resorts, and of prostitution. These two Macaus seem to be spatially separated from each other, with an intact colonial city centre and nice outskirts with small alleys on the one side, and bombastic, modern buildings on the other. 

The Galaxy - one of the huge casino and hotel resorts

The Importance of Gambling for Macau's Economy

Dubbed the 'Monte Carlo of the East', Macau has often been portrayed as the gambling capital of China. Media reporting on Macau tend present pictures of the city's glistening, apparently luxurious skyline. But a visit in Macau suffices to realize that it is far from being as wealthy and posh as one might assume. Macau's gambling and casino districts look rather sluggish, unadorned, and exaggeratedly bombastic, lacking the charm and the spirit of real affluence.

Macau is forced to depict itself as a paradise of gambling, because its economy is heavily dependent on tourism and casinos. Without it, the city would lose its main source of revenue. However, Macau does not possess the vitality and rhythm of a vibrant, dynamic economy, as it can be found in the throbbing streets of Hong Kong.

Macau's economy experienced strong growth in recent decades. In 2002, a partial liberalization of the gaming industry, with six competing concessions replacing an old monopoly system, fueled economic growth (Lam / Scott 2011 , p. xi). Macau's GDP rose by staggering 16.6% in 2006; in the same year its gaming revenue surpassed that of Las Vegas, making it the world's number one gaming centre. 

The gaming industry accounts for 75% of all government revenue. With a population of just around 500,000, Macau welcomed in 2008 more than 30 million tourists, 60% of whom were mainland Chinese (CIA World Factbook 2010, p. 414). The gambling and tourism sectors are also by far the largest employers, with around 97% of the labour force employed in services (ibid.). The percentage of people directly employed in the hotel and gaming sector grew from 25.3% to 35% between 2004 and 2008 alone (Lam/Scott 2011, p. 26). 

Macau's reliance on the gaming industry is not a recent development. It had already begun during the Portuguese colonial rule. The Portuguese did not have an economic strategy for Macau. While the British used Hong Kong as their trade and financial outpost in Asia that was backed by the English economy, which was in those days the largest manufacturing economy in the world, Portugal was not capable of creating growth in Macau because it was itself a poor, mostly rural country. Apart from opium and human trafficking, there were no profitable activities for the people in the colony. In the second half of the 19th century, however, a new opportunity opened up for Macau when both Hong Kong and mainland China banned gambling (Hao 2011 , p. 74). 

The colonial administration began licensing gambling houses already in 1847. In 1910, 70% of government revenue came from gambling and opium (ibid., p. 27).

The Galaxy - It looks like a combination of the East German Palast der Republik and Soviet-era Lomonosov University

In 1962 the government granted a monopoly to the Sociedade de Turismo e Diversoes de Macau (Macau Tourism and Entertainment Company, STDM), owned by Hong Kong business magnate Stanley Ho (Hao 2011, p. 75; Lam / Scott 2011, p. 5). At the same time, Macau also developed an industrial sector, with manufacturing accounting for 40% of GDP in the 1970s and 80s (Lam / Scott 2011, p. 5). 

Nevertheless, from 1967 to 1992 Macau's growth did not create widespread wealth. In fact, workers were underpaid, there were no investments in upgrading the skills of the labour force, and GDP growth did not result in an expansion of government spending in housing projects or social services. Many industrialists who moved their factories from Hong Kong to Macau replicated here the same short-term model of employment of unskilled, low-wage labour that did not help either raise the standard of living   or improve productivity. Moreover, Macau's wealth gap remained large. 

"By 1988 [...] the poorer half of Macao residents earned 20 percent of the income while the other half received 80 percent; the richest 15.5 percent received half of the income" (ibid.). Ironically, Macau's economic system was more based on laissez-faire than in Hong Kong; in the British colony, as I noticed in a previous post, the government actively sought to redistribute wealth by financing social services and housing construction projects.

Chinese Officials and Gambling Scandals

During his period of training at the Central Party School in Beijing, Ma Xiangdong, ignoring the official regulations, often flew to Macau to engage in gambling tours. Eventually, he rose to become deputy mayor of the city of Shenyang, but his gambling obsession, instead of abating, intensified. With public money at his disposal, he had now plenty of resources for indulging in his illegal and costly hobby. Once he gambled away 10 million yuan in just three days. 

In 1999, however, he was spotted by security agents in a casino. He wasn't alone.  With him there were other senior cadres of Shenyang, among them the head of the treasury department. In more than 17 gambling trips to Macau, Ma allegedly lost more than 30 million yuan (Sun 2004 , pp. 181-182).

The investigations that resulted from this scandals led to the discovery by the Chinese authority of a web of corruption in Shenyang. The embezzlement of public funds caused major financial problems in the city. Whenever cases of government corruption or misconduct become known to the media, the Communist Party shows no mercy. At last, Ma Xiangdong gambled away not only taxpayers' money and bribes, but his own life, too. In 2006 he and public property chief Guo Jiuci were sentenced to death for accepting bribes and "bringing heavy economic losses to the nation" (note).

Macau's best clients are gambling-addicted Chinese officials squandering public money, but they are a thorn in the side of the Chinese government, which is trying to polish its image and present itself as honest and incorruptible. Ma's case is not an exception. As the New Yorker reported:

[C]onsider the pair of Party propaganda chiefs—named Zhang and Zhang—who lost more than $12 million in Chongqing public funds at the Lisboa Casino in 2004. Or Zhang Jian, a former Party chief in Jiangsu, who lost $18 million. Or Li Weimin, a Party chief in Guangdong, who lost $11.5 million (The New Yorker April 16, 2012).

Prostitution in Macau

Gambling and prostitution somehow seem to go together. If you have money to lose in a casino, you will probably have enough for a young girl offering her company to wealthy tourists. In recent years prostitution in Macau has been driven mostly by mainland Chinese girls, following a pattern similar to that in Hong Kong. 

A number of girls forced into prostitution exists, but that doesn't mean that it represents the majority. The huge income gap in Chinese society, most especially between rural and urban areas, has prompted many young girls to become prostitutes. Though they may not be really compelled to do that, they see it as a way to earn money to improve the financial status of their family (see Yang 2010 , pp. 87-88).

Typically, unmarried rural girls of 18 to 29 years old would tell their families they were seeking jobs in the cities, while actually becoming prostitutes. After gaining some experience, these girls might join the army of migrant prostitutes, going to Hong Kong, Taiwan, New York, Tokyo or London with a work visa. After managing to build up savings, they might return home to get married or start a family business (ibid., p. 88).

Many of these girls choose to go to Hong Kong or Macau, both because of the relatively permissive legislation towards prostitution if compared to the mainland, but also because of the huge amounts of money circulating in those cities. Although Hong Kong and Macau are parts of China, their status as Special Administrative Regions means that mainlanders need a visa to enter their territory. Prostitutes exploit the loopholes in the visa regulations to stay as long as they can, but given the limited time, they try to lure as many customers as possible in order to maximize their profits. 

Xiao Tan, a 24-year-old mainland prostitute active in Macau, was interviewed by a team of researchers. She explained how she bypassed visa restrictions:

I entered Macau with a tourist visa issued by the Thai government. In transit, I can stay in Macau for 14 days. Then I can go back to China and return to Macau and stay other 7 days. After that, I must go to Thailand, stay there overnight, and fly back to Macau and then stay for 14 days. So I can stay in Macau 35 days altogether. The tourist visa is valid for 3 months and that means I can repeat the above process one more time. In short, I can stay in Macau for 70 days with a 3-month tourist visa to Thailand (Chin / Finckenauer 2012 , p. 84).

Another mainland girl told the story of how she ended up working as a prostitute in Macau:

A friend of mine who is a xiaojie [prostitute] introduced me to a chickenhead [pimp]. There is a network of chickenheads active in my hometown. He showered me with affection and he courted me, and then after we were together, he urged me to go to Macau to make money. He said he will take care of all the travel documents and will ask a woman who had been to Macau to take me there. Even though I had never been a xiaojie in China, I agreed to go to Macau to be a xiaojie. He did not tell me how much I should pay him for this help, but he made it clear that I will be working as a prostitute in Macau"(ibid., pp. 84-85).  

A Beautiful, Fake World - The Venetian

The Venetian Macao

One of the most impressive hotel and casino resorts in Macau is the Venetian. Owned by Sheldon G. Adelson, the Venetian is a monument to the desire of Macau's gambling magnates to attract visitors by offering them nice illusions; the illusion of style and history, of elegance and wealth, of happiness and self-confidence. 

The Venetian is all about hyperbolic numbers: it cost US$2.4 billion, it is the second largest building in the world, it boasts 3,000 all-suite guest rooms and one million square feet of retail space, it has the largest casino in the world at 550,000 square feet etc. As its name suggests, the architecture of the Venetian is designed to replicate that of renaissance Venice, with copies of famous sites such as St. Mark's Square, the Doge's Palace, the Campanile Tower, and the canals (note). 

As an Italian, I cannot help finding this huge, colossal structure extremely fake. Cheap replicas, artificial canals, Chinese gondoliers, a fake sky - it looks like a gigantic, megalomaniac dummy. The architects tried to give to the building an aura of opulence and elegance and copying works of art. But this ostentatious attempt at being refined actually has the opposite effect of making it appear vulgar and pretentious. 

Fake canal, fake gondolier

Fake buildings - real shops

Notice the fake sky