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How "Shanghai Boy", an alleged Triad Leader, may have lost his Money in Macau

It was the Sunday before Chrstmas 2015. The heavily guarded alleged triad leader Kwok Wing-hung, called "Shanghai Boy", had afternoon tea in Hong Kong’s noble Peninsula hotel, when suddenly someone walked in, punched him in the face, before he ran away, forcing him to seek hospital treatment. One day later "Shanghai Boy" showed his face to reporters and commented: “Someone said [I was] killed. You see. I’m in good shape” and added according to South China Morning Post: “[I] just bumped into a table corner. You see how handsome [I am].”

"Shanghay Boy" then invited Hong Kongs media for a press conference on Tuesday 29 December. But his public relations manager had to try to explain to the waiting reporters and police men, why he did non show up. On Thursday 31 December posters offering a reward in return for the whereabouts of Kwok Wing-hung were stuck up around parts of Hong Kong. Masked men were sticking flyers on the walls of Peninsula hotel, as CCTV-cams registered.

Like this a year ended, during which "Shanghai Boy" literally had lost a lot of his face - and according to rumours a lot of money in Macau. As the Wall Street Journal reported, Kwok was a partner in VIP gambling rooms at MGM Resorts International’s casino and Melco Crown Entertainment Ltd.’s City of Dreams resort in Macau. Such rooms are operated by middlemen, who bring rich Chinese gamblers to Macau, lend them money and collect their gambling debts. But many of these rooms were closed in 2015, when Macaus game revenue went down by 34 percent and rich Chinese didn't show up anymore after a warning by President Xi Jinping during his anticorruption campaign. "Crashing revenue forced Mr. Kwok’s VIP rooms to shut, leaving him with financial disputes and considerable personal gambling debts", wrote the Wall Street Journal.

So far, "Shanghai Boy" has not been seen in public anymore. But more flyers appeared in Hongkong, this time seeking for one of his right hands, Lee Kai-yau. These events led some media to remember Macau's bad old days, when the casino middlemen and their triad partners were notorious for gun battles in Macau’s streets.


Read more:
Game over in Macau?

Game over in Macau?

Picture by marhas
Glamour as usual for Christmas on Macau's Senado Square. But the economy is in deep recession.

“Fear and loathing in Macau”, “A falling house of cards” and “Death spiral”: Analysts found pessimistic words in 2015. And now has come true, what they predicted: The gaming revenue in Macau has fallen by 34 percent in 2015. And one man has been blamed for it by many: Chinas president Xi Jinping.

Gaming revenue fell 21.2 per cent in December, declining for the 19th consecutive month, according to numbers released by Macau's Gaming Inspection and Coordination Bureau, reports AFP. For the year, revenue was down 34.3 per cent to 230.84 billion patacas (US$ 28.92 billion).

The slowdown in Macau, a semi-autonomous Chinese city and former Portuguese colony, the only place in China where casino gambling is allowed, is visible these days, when you visit the casinos: You find empty tables, where no one plays. VIP gambling rooms, which had been operated by middlemen, who brought rich mainland gamblers to Macau, lended them money and collected their gambling debts, have been closed. The middlemens business was no longer lucrative.

Picture by marhas
The shopping mall of "The Venetian" still looked strongly frequented in December 2015, bot the malls of other casinoresorts did not look that crowded.

The slowdown has been in part attributed to the crackdown on corruption and capital flight led by Chinese President Xi Jinping, in another part to the economic slowdown in China. Xi Jinping personally made it clear that the Chinese government wants Macau to move away from gambling. In December 2015 he visited Macau, and his warning, that the territory’s overreliance on the gambling industry had caused “deep-seated problems”, sent shockwaves through Macau's administration.

Shortly after the visit the local government ordered a full ban on smoking inside the casinos, well knowing, that a majority of gambling patrons are smokers. The age for access to the casinos has been lifted from 18 to 21 years. Chinese officials have intensified monitoring of Chinese travelers’ use of UnionPay, the only domestic bank card in mainland China. Visa restrictions for mainland Chinese entering Macau have also tightened. And: Chinese highrolling gamblers now fear the CCTV-cameras in the casinos and their use by Chinese authorities. Crackdowns on underground banking and prostitution in Macau followed.

Picture by marhas
The entrance of the casino in "The Venetian" in December 2015: not masses on the way to gambling...

"Investors who had been wildly bullish on Macau casinos have now grown frustrated. Shares of the five major Hong Kong-listed casino operators have fallen an average of 48% this year as of Tuesday’s closing price", noted wsj.com.

The changing policies came in the wrong time for the Casino industry and their expansion projects. In October, Melco Crown opened Studio City. The $3.2 billion hotel complex with the usual collection of restaurants, bars and luxury shops and family attractions like a Batman-themed flight simulator and a play area with rides based on Warner Bros. cartoon and comic book characters is astonishingly short of gambling tables, as Neil Gough wrote on nytimes.com. The local government permitted only 200 tables for the start — half the number that Studio City’s owners had planned. Studio City is also the first casino in more than a decade without any private gambling rooms for high rollers. The investors were not amused about the cut of the return of investment.

Galaxy Entertainment Group in May also launched a major expansion. And in the next two years Las Vegas Sands Corp., Wynn Resorts Ltd., MGM and SJM Holdings Ltd. all plan to open multibillion-dollar resorts. But the opening of the US$ 4.1 billion Wynn Palace - a 1700-room resort ariund a lake with gondolas - already has been delayed until June of 2016.

Wynns Palace is not the only delay in Macau. Macau’s economy is now in deep recession and the once cash-rich government has to cut the budget. Therefore Macau's light rail project under construction (called LRT), designed to move visitors and locals around the city, is on delay too. The section on the island of Taipa should be operational by 2019, the Secretary for Transport and Public Works, Raimundo do Rosário, announced in December. Originally this was planned for 2016. And no timetable has so far been announced for the start of construction on the Macau peninsula section of the rail link.


On delay: The light train system, which should transport tourists, is under construction only on the island of Taipa, connecting the airport with the casinoresorts.


Read more:
Stanley Ho’s nephew, 96 ‘prostitutes’ and five hotel staff held in Macau hotel vice bust
Macau's sex trade dealt a losing hand
Macau Triads Still Ingrained in Gambling Markets
Macau - another year on the waitung list
China feared CIA worked with Sheldon Adelson's Macau casinos to snare officials
Former U.N. President and Chinese Billionaire Are Accused in Graft Scheme
How "Shanghai Boy", an alleged Triad Leader, may have lost his Money in Macau
What lies behind China’s clampdown on foreign casinos