How China crushed the triad gangs and created the world's new gambling Mecca.
- By Benjamin CarlsonBenjamin Carlson is the Hong Kong-based senior correspondent for Global Post.
MACAU — One of Macau’s most infamous gangsters must be feeling like Rip Van Winkle.
When Wan Kuok-koi, 57, better known as Broken Tooth, was released from prison on Dec. 1, nearly 14 years after he went behind bars, he emerged to a city utterly transformed. Instead of cars burning in the streets, Bentleys with dual Macau-China license plates prowl newly built highways. Gone is the sleepy, rough-around-the-edges colonial backwater, supplanted by a city that has become the gaming capital of the world, with more than five times the annual gambling revenue of Las Vegas. In a little more than a decade, Macau has calmed down, cleaned up, and gotten immensely rich. And now, nearly two months after being freed, the former leader of 14K, Macau’s biggest and most-feared criminal triad, has barely made a ripple. After vowing there was "absolutely no way" he would disturb the peace in Macau, Broken Tooth seems to have gone into hiding, with local media reporting a rumor that he exiled himself to Thailand or Hong Kong for several months as part of an agreement with Chinese authorities.
One month before he was arrested in 1998, Wan said that "anyone who’s done something bad to me will never escape. I won’t kill him. I’ll make him take a voyage to another world." Now he says he simply wants to become a law-abiding citizen, and that revenge is a thing of the past. "I don’t want to affect the stability of Macau. There’s absolutely no way I want to do that. I want to be left alone," a bashful-sounding Wan said to the Hong Kong-based English-language newspaper the South China Morning Post.
It’s a far cry from the swaggering Broken Tooth of old, but one that fits the times. In 1998, Wan was the irrepressible criminal king of Macau, then a Portuguese colony in its tumultuous last days. Like Bugsy Siegel in 1940s Las Vegas, he had a reputation for violence, ruthlessness, and ambition that approached megalomania. Wan earned his nickname as a young man after crashing his car and damaging his teeth. (He later had them capped.) As he rose through the triad ranks, he was shot twice and survived an attack from a meat cleaver that rendered two fingers permanently immobile. In the 1990s, he drove a purple Lamborghini and bragged about losing more than $1 million at a single gambling session. In an interview with Newsweek in 1998, he claimed to have 10,000 triad followers. And at the time of his arrest for loan sharking and money laundering, he was said to be watching the 1998 movie Casino, an autobiographical film he commissioned to dramatize his criminal exploits (not, it seems, connected to the Robert De Niro film of the same name).
In the years leading up to Macau’s handover to China, triad violence surged as gangs vied for a bigger share of the pie that would be left after Portuguese power receded. The high point was 1999, the year of the handover, when 42 people died in gang-related attacks. Broken Tooth’s triad torched cars and was believed to have killed a Portuguese gambling official near the Casino Lisboa. At Wan’s disco, Heavy Club, a mannequin dressed in a police uniform reportedly dangled from a noose tied to the ceiling.
Under Portugal, a somewhat reluctant colonial power, the city had a sleepy air and a sluggish economy to match: a combination of triad violence and the Asian financial crisis caused Macau’s gross domestic product to contract by 6.8 percent in 1998. Portugal repeatedly tried to return Macau to China as part of its 1970s decolonization push, but Beijing refused to retake sovereignty until 1999. At the time of the handover, textile manufacturing dominated Macau’s economy, and the relatively small casino industry was controlled entirely by Stanley Ho. Seen in Macau as a sort of roguish, eccentric patriarch — part Howard Hughes, part Donald Trump — Ho allegedly earned the money to start his first business as a reward for single-handedly defeating pirates who attacked an employer’s ship during World War II.
Nowhere is the contrast between then and now more apparent than in the Lisboa, Ho’s landmark property and one of the city’s oldest and most iconic casinos. It was also Broken Tooth’s old haunt. Wan allegedly had a $50 million stake in a VIP room at the Casino Lisboa and was arrested in a suite at its hotel back in 1998. Then, the casino — a tacky structure resembling a multicolored onion — was guarded by a battalion of cops wielding automatic weapons. Today, the automatic weapons are gone, the casino has expanded with an enormous, glitzy addition shaped like a golden lotus flower, and the lobby is filled with tourists elbowing each other to pose in front of a life-sized gingerbread house. (The seamier side remains: A basement hallway below the Lisboa has a parade of prostitutes perpetually cat-walking between a restaurant and a fruit stand.)
In 2002, the Macau government broke Ho’s monopoly on gaming and opened it up to international players. It granted six casino licenses to foreign operators, including Las Vegas mogul Steve Wynn and GOP-bankroller and Las Vegas Sands CEO Sheldon Adelson. (Ho remains a powerhouse; he owns 17 of Macau’s 34 casinos.) Beijing also loosened restrictions on mainland tourists coming to visit Macau, in an effort to boost the economy after the SARS epidemic struck China in 2003. And yet Macau’s success was far from a sure bet.
The outlook for the city at the time was still murky enough that Gary Loveman, CEO of the world’s largest gaming company, Caesars Entertainment Corporation, gave Macau a pass — a decision he has since called his worst mistake. In 1998, 800,000 mainlanders visited Macau. In 2011, it was 16 million. As the only Chinese territory where casino gambling is legal, Macau has an irresistible allure to the newly rich and the middle class alike. In 2012, gambling revenues reached $38 billion. But one of the most striking changes after the handover was an end to the violence that had plagued the territory. Immediately after regaining sovereignty, China set up a garrison of the People’s Liberation Army in Macau. Within a year, violent crime had dropped 46 percent. This was due partly to the jailing of Broken Tooth and the presence of China’s military. But much of it is because it’s more profitable for triads to help keep the peace.
Triads get a piece of this new action by dominating the "junket" industry of Macau, which brings high-rolling gamblers to the territory and collects debts on behalf of the casinos. These businesses also allow VIPs to stake more than the $50,000 legal limit on how much money Chinese are permitted to take out of the country every year. (In essence, junkets collect their clients’ money on the Chinese side of the border and give them loans to gamble on the Macau side.) This scheme makes a convenient vehicle for money laundering. Steve Vickers, Hong Kong’s former chief of the Criminal Intelligence Bureau, has said that he knows of "no Chinese junket operator that doesn’t have some association with triads."
Although Broken Tooth’s conviction dealt his old triad, 14K, a heavy blow, the gang remains active in Macau, as do his former associates. In August, six men with alleged triad ties, wielding hammers and sticks, attacked Ng Man-sun, one of Broken Tooth’s bitterest former rivals. And one week before his release, police arrested Broken Tooth’s former right-hand man for attempted murder.
"Everyone realizes that triads are still active," says Ricardo Pinto, a Portuguese publisher who covered the triads as a journalist in the 1990s. "Now they are working in a kind of legal framework, which of course changes very much the perception of their activities…. Now they are behaving more like normal businessmen. They made peace with society and joined Macau by operating in a legal way."
That is not to say that triads have given up on crime, of course. Around the world, these crime syndicates continue to be major players in drug trafficking, prostitution, financial fraud, software piracy, loan sharking, and human smuggling, according to a Library of Congress report on Chinese criminal organizations.
"Junkets are allowed to operate because they are good for the business of casinos," says Bill Chou, professor of public administration at the University of Macau. "The casino license holder does not care how they go about attracting the high rollers, who are sometimes also the gangsters in other parts of the world." He says that junkets are seen as more or less mainstream businesses, though most "are still controlled by gangsters."
The junket trade can still lead to some occasionally violent attacks that take place out of the public eye. In July, two mainland gamblers were stabbed to death in a five-star hotel after failing to pay up on large gambling losses. That same month, a Chinese woman with a Japanese passport was found bludgeoned to death in a residential area. Macau police believe both crimes are tied to junket operators and triads. Both murders remain unsolved.
For locals, Macau’s rapid changes have not all been positive. The flood of tourists and foreign money has driven up the price of real estate by more than 400 percent since 2004. Traffic and pollution have worsened. And residents say the government has all but ignored their concerns in the drive for breakneck economic growth.
"Like China, Macau has become one of the most money-making places in the world," says Hao Zhidong, a sociologist at the University of Macau. In fact, he says, many people have actually become nostalgic for Portuguese rule — Broken Tooth and the years of violence notwithstanding. Many say the city has become too venal, too focused on gambling, and too indifferent to the political demands of its citizens.
Even though Broken Tooth’s days as a kingpin may be over, whenever he returns from exile, he may find Macau almost as congenial a place to make money as in the 1990s. While he lost millions of dollars in property due to police confiscations after his arrest, he has emerged from prison with many connections intact, including his brother, Wan Kuok-hung, who built a profitable business supplying uniforms to the casinos. Local newspapers have even reported a rumor going around — that Broken Tooth’s old friends and rivals have decided to give him a welcome-back present: a share of the lucrative junket business in exchange for hanging up his gun. Defanged, perhaps, but not out of business.