Dancing with the Dragon By Ken Adams, CDC Gaming Reports July 5, 2020 at 8:12 pm Keeping an eye on China and Macau from seven thousand miles away is never easy, but it can be very entertaining watching foreigners dance with the dragon. Between May 21st and May 27th, the Chinese Communist Party held two meetings: the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Conference. “Representatives of the Chinese people gather to chart the course toward building a moderately prosperous society in all respects, achieving national development goals and (the) warding of COVID-19.” Premier Li Keqiang hedged his bets in saying that Beijing is facing some difficult and uncertain times. In previous meetings, President Xi Jinping set a high bar for 2021, the centennial of the founding of the Chinese Communist Party. In particular, Xi called in China’s Dream, under which China plans to have eliminated abject poverty and become a “moderately prosperous society” by 2021. Xi’s vision is for China to be “a prosperous, strong, democratic, culturally advanced, harmonious and modern socialist country” by 2049. That year marks 100 years since Mao established the People’s Republic. There is still plenty of time to become advanced, harmonious, modern, and strong, but the “moderately prosperous” thing may have to be adjusted in the light of trade, border, and coronavirus wars. Therefore, the party is going to focus on getting the economy back on track. Many of the measures introduced are the same as in other countries: tax breaks, government loans, and other types of economic assistance, for example. Chinese leader Xi Jinping Of course, much more was said, and more plans and promises were made. It is, after all, Communist China, the land of big plans. Analysts read the transcripts, listened to interviews, read between the lines, and interpreted the metaphors, but understanding the Communist Party is never easy. In fact, it is so complicated – and so important – that all of the casinos in Macau conducted full-day seminars for their managers. According to a statement released by Sands China, the goal of the seminar was to help participants develop an in-depth understanding of the spirit of the NPC and CPPCC sessions and of the ‘One Country, Two Systems’ protocol, and to examine how these ideas can be implemented in Macau. Sands China president Wilfred Wong Ying-Wai said: “It is crucial that our team members fully understand the direction of national policy, as the destiny of our nation and Macau are intertwined.” Three hundred people attended the seminar. It would be difficult to find a comparison, an analogy, or, indeed, an explanation for these meetings, except that in 2022 all the gaming concession licenses will be up for review and possible renewal. No formal guidelines have yet been released, so gaming operators are left in the dark, guessing. They are also left trying to understand the policies of China and what China expects of the licensees. All they have been told to this point is that they are required to diversify from gaming in the hopes of drawing more international tourists to Macau. The casinos, and Macau as a whole, are also part of the strategy for the Greater Bay Region and the Belt and Road initiative – and, thus, a part of the overall strategies and vision of Xi’s China, albeit a rather small part. With no better guidelines, casino owners and managers are studying the politics and policies of the Chinese Communist Party. They are trying very hard to be good corporate citizens and please their overlords. During the coronavirus crisis, they have retained all employees and donated millions of masks, money, and food not only to people in Macau but in mainland China also. They support small businesses and stand ready whenever called upon for more. But will it matter? Is it enough? The criteria include issues that have never before been discussed in public: namely, the culpability of casino operators in crimes that occur in the casinos of Macau. One issue is the source of the high-roller cash that has made Macau so profitable for casino corporations. It has always been curious that citizens of a communist country like China should have so much money to throw away on the gaming tables of Macau. Party members, businessmen, and others of similar societal standing come to Macau with tens of millions of dollars to lose, and then, when it was gone, they went home. But they came back, again and again. In 2014, President Xi cracked down on corruption in China. Almost immediately, revenue in Macau dropped drastically. Over the course of the next year, as prosecution progressed, stories of party officials and businessmen accepting bribes and embezzling hundreds of millions of dollars surfaced. It became clear that some of those ill-gotten dollars found their way to the casinos in Macau. Did the casinos suspect the source of those big bets, were complicit in the crimes of the corrupt? The second issue also concerns illegal funds and activities: loan sharks and kidnappers. Innocent – or so they’re portrayed, at least – Chinese citizens who want to make big bets in Macau borrow money from loan sharks, who just happen to be standing by with cash they are willing to loan. If the gambler wins, the shark takes his money, plus interest, from the gambler right there in the casino. If the unfortunate gambler loses, he quickly finds himself locked in a hotel room with a telephone. He is told to get the money from his friends, family, anyone who will pay the ransom. It is apparently an old dodge developed by the triads in the days before Macau was returned to Chinese rule. Several hundred people a year are arrested in Macau for loan sharking and kidnapping. And now, with business bad in Macau, the practice has begun to move to the Philippines. The fact that gamblers are being kidnapped and scammed in a casino might or might not implicate the casino, but there is a case pending now that might indicate the casinos are liable. A former director for Gaming Inspection has said: “If the license is yours, the problem is yours. You have to find a way to control (it), according to the contract between the junket and the concessionaire. So, if, one day, the court decides that the concessionaire is also responsible, the gaming operator will have to be more careful when selecting the junket or they’ll have to manage VIP gaming by themselves.” While he was addressing VIP junkets, the operational part of the statement could easily be “if the license is yours, the problems is yours.” In that case, both the corrupt, embezzling VIPs, and the loan sharking and kidnapping could be held against casinos during the upcoming license reviews. Macau has been a very attractive and profitable place to do business, but it is fraught with risk. Gathering all of a property’s employees together to watch seminars on Chinese Communist policies may help, but I cannot see how. Dancing with the dragon is not a Viennese waltz; sometimes the dragon steps on his partner and crushes him. That said, I live seven thousand miles away. I am trying here to read between the translated lines and interpret the metaphors of a very old culture. The term “moderately prosperous” comes from a Chinese poem written 3000 years ago.