So far as casual observers can see, China’s leadership has had three reservations about Macau’s post-1999 Mainlander-oriented gambling industry.
First is that access to the casinos facilitates and encourages moral lapses among Chinese officials, by giving corrupt individuals the means to launder dirty cash and by tempting them to acquire illicit funds with which to gamble. (Interesting how Macau gambling and Mainland corruption stimulate each other.)
Second is simply a mercantilist concern about the currency outflow and the feeling that this is money that could stay in the Mainland and benefit local economies. (Hence occasional calls for casinos to be legalized in Hainan and other provinces.)
Third is nationalistic resentment at the way American casino operators scoop up much of the profits. The Hong Kong and other ethnic Chinese gambling/hotel interests have obvious reasons to encourage this sentiment. And bearing that in mind…
A fourth now comes to light: fears that American-owned casinos serve as fronts for US influence in Macau, and host CIA agents who target Mainland officials for blackmail. The Standard has a quick summary here; EJ has a fuller one. The story itself is in the Guardian, which managed to obtain a document submitted as part of an unfair dismissal case in Nevada against casino operator Sands. The document was a report commissioned by Sands to investigate possible political problems the company was facing as it tried to expand in Macau. The Guardian presents the Vickers Report, as it is known, here.
The report dates from 2010, before Xi Jinping’s rise to the top and the launch of the anti-corruption campaign that has hit the Macau gambling sector quite hard. Much of it covers the background of Macau Chief Executive Fernando Chui Sai-on (rich family, trusted by Communist Party, etc). But it also suggests that Beijing viewed Sands in particular as pretty much intertwined with US government interests.
The suspicions about the CIA are not very surprising: casinos probably offer spooks excellent ‘asset-recruitment’ opportunities. What is more telling is the apparently instinctive paranoia among Chinese officials about foreigners and their motives. If the report is accurate, they see the US government and US companies as indistinguishable in terms of national security risk. In other words, Sands’ lust for more market share and more profit was interpreted in Beijing as an attempt by Washington to undermine Chinese sovereignty in Macau. This was five years ago under Hu Jintao; it can only be worse now.
Of course, Macau’s local casino owners would have a big interest in encouraging this sort of paranoia among Chinese officials. The report seems to conclude with mention of aging mogul Stanley Ho, but, disappointingly, that last page is blacked out. However, the investigative agency that wrote it, Hong Kong-based Steve Vickers Associates, have recently mentioned that nationalism could affect prospects for foreign-owned casinos in Macau.
The other noteworthy thing about the report is a linguistic quirk. Where most of us would write ‘Bob bent over to tie his shoelaces’, the report says ‘Bob bent over; this to tie his shoelaces’. If it was just once, we wouldn’t notice – but this curious construction appears on nearly every page.
As it happens, Sands boss Sheldon Adelson and President Obama are not best buddies, but that’s probably by the by.