Clinging to the past is a gamble with the future

PUBLISHED : Sunday, 21 September, 2003, 12:00am
UPDATED : Sunday, 21 September, 2003, 12:00am

The importance of the Las Vegas connection to Macau's dream of transforming itself into a top international gaming and entertainment centre cannot be doubted. Having broken up its 40-year-old gambling monopoly last year to bring in two big hitters from the US, the once sleepy enclave is looking forward to showcasing their glitzy casino developments. So when one of the leading lights behind the ambitious project suddenly threatens to pull out, it is a matter to be taken seriously. High-flying casino mogul Steve Wynn, whose company is committed to pumping at least $4 billion into Macau resorts over seven years, has done just that. He accuses the city of dragging its feet on the promised introduction of laws which could help stamp out the involvement of organised crime on the fringes of the industry.

Commentators in Macau have not taken kindly to the tycoon's remarks, suggesting he should strive harder to adapt to the enclave's way of doing things. One official went so far as to warn him: 'In China, you don't express your concerns with a megaphone.' While there is always a need for understanding on both sides when doing business involves a clash of cultures, Macau must understand that it, too, has to adapt if its bid to become a gambling-oriented magnet for tourists in the region is to be a success.

It is the gambling scene, as much as its history as a Portuguese colony, which makes Macau a unique part of the Pearl River Delta. Casinos are not permitted either on the mainland or in Hong Kong. But the pervasive involvement of organised crime has blackened the image of the industry for much of its 150 years in Macau. It was at the root of the violence which marred the run-up to the city's return to China in 1999, with 34 people losing their lives that year in a wave of gangland car-bombings and shootings. Since the handover, the violence has all but disappeared, and Macau has made great strides in cracking down on crime. Nevertheless, and despite the best efforts of the law enforcement agencies, the gangsters are still able to ply their disreputable trade in gambling-related activities. Until the last vestiges of the seedy side of the industry are removed, Macau will not be able to lay claim to the mantle of family-friendly entertainment centre to which it aspires.

Mr Wynn is, no doubt, a wily operator who, like any businessman, is seeking to maximise the profits of his enterprises. His desire for tax concessions and the right to grant credit will further that aim. But there are other reasons for his frustration. He has a responsibility to ensure events in Macau do not jeopardise his company's standing in the eyes of the Las Vegas licensing authorities. This, as he suggests, requires a safe regulatory environment in Macau.

The city is clearly progressing towards that goal. The legislation Mr Wynn wants is expected to be presented next month and the city is perfectly entitled to insist on following its own legislative procedures. The other Las Vegas player in Macau, The Venetian, while also keen to make the industry squeaky clean, has adopted a less confrontational approach and has been helping advise on the laws which need to be passed. There is every reason to be confident that, before long, the necessary reforms will be in place.

But the reaction of some in Macau to Mr Wynn's comments highlights a bigger problem. It is justifiably proud of its unique blend of Canto-Portuguese culture. Its reluctance to give up its traditional ways is understandable. But change became inevitable once the major players from Las Vegas were invited in. Striking the right balance is its challenge, and there will be a need for compromise - albeit not when it comes to kicking crime out of the casinos. Macau must ensure it puts in place a regulatory regime which meets the highest standards. Only then can it begin making its dream come true.