TOURISM, GAMBLING, NORTH KOREAN MONEY

Japanese interest in Macau reaches new heights

by Reiji Yoshida

MACAU, China — Macau is definitely a hot spot these days,
not just as a tourist destination but also as a focal point for
international diplomacy and security.

Entrance hall of a luxurious hotel-casino complex in Macau, China WIDTH="250" HEIGHT="188"/> Guests
stroll through the entrance hall of a luxurious hotel-casino complex in
Macau, China, recently.
REIJI YOSHIDA PHOTO

The Macau government announced late last month that total
revenue from casinos surged 22 percent to hit $6.95 billion last year,
making the city the world’s largest casino town by surpassing the
estimated $6.5 billion in revenue for Las Vegas.

The booming casino economy continues to attract foreign
investors, including Virgin Group founder Richard Branson, to keep
building new casino-hotel complexes, changing the face of central Macau.

Seven large casinos opened last year alone and five more are
reportedly planned for this year.

The main target of foreign investors are newly affluent
Chinese mainlanders who flock in to try their luck at the gaming
tables.

The streets of downtown Macau have seen big changes in recent
years, as numerous high-rise buildings have gone up and roads have been
paved with stones in Portuguese style to attract more tourists.

“Walking along the streets, I now keenly feel there are more
people in town than before,” said Yoko Kutsuwada, operation manager at
the local office of travel company JTB Corp. She has lived and worked in
Macau for more than 21 years.

In addition to encouraging construction of huge, bizarre
casino complexes, the Macau government has increased efforts to spruce
up downtown to attract more tourists from overseas, Kutsuwada said.

“Many trees have been planted and (the downtown area) has
become much cleaner,” she said.

The casino boom likewise has revived Japanese tourism to
Macau, which had gone into free fall following Hong Kong’s financial
crisis in the late 1990s and the Severe Acute Respiratory Syndrome
(SARS) crisis in 2003.

After hitting rock bottom at 85,000 Japanese tourists in
2003, the number turned around and rapidly grew to 220,190 in 2006.

Kutsuwada said most Japanese come to Macau on same-day tours
from Hong Kong.

However, travel agencies have started arranging stand-alone
tour packages for Japanese travelers, many of whom stay in Macau’s new
casino-hotels, Kutsuwada said.

The prosperity of the gambling industry, however, has also
spotlighted the city’s dark side, which has come under the focus of
world diplomatic leaders as well as the Japanese public concerned about
national security.

The same week the Macau government announced last year’s
casino revenues, the United States and North Korea were engaged in
negotiations in Berlin over Washington’s financial sanctions on a Macau
bank.

Banco Delta Asia has been accused by the U.S. of assisting
“numerous illegal activities” by North Korea, including distribution of
counterfeit U.S. currency and providing service to a North Korean front
company smuggling counterfeit tobacco products, both allegedly produced
by the North.

Pyongyang has insisted that lifting the U.S. sanctions on BDA
is a precondition for responding to any diplomatic talks on its nuclear
weapon development, making the BDA money-laundering problem critical for
countries, most notably Japan, concerned about the North’s nuclear
threat.

According to the U.S. Treasury Department, senior officials
at the BDA were “working with (North Korean) officials to accept large
deposit of cash, including counterfeit U.S. currency, and agreeing to
place that currency into circulation.”

“Banco Delta Asia’s special relationship with (North Korea)
has specifically facilitated the criminal activities of North Korean
government agencies and front companies,” the Treasury Department
alleged in its September statement.

Experts say the huge cash transactions that regularly take
place in a casino city provide perfect cover for money-laundering, and
Macau is one of the best locations for such purposes.

“Macau’s free port, lack of foreign exchange controls and
significant gambling industry create an environment that can be
exploited for money-laundering purposes,” according to the 2006
International Narcotics Control Strategy Report by the U.S. State
Department.

“Macau’s international gambling industry . . . remains
particularly vulnerable to money-laundering,” the report states.

Kutsuwada of JTB’s Macau office said the local media has not
played up the BDA money-laundering issue as much as Japanese
media.

Macau’s media and residents appear more concerned with
further development of the flourishing local economy, including a number
of ongoing casino-related investment plans, she said.

Kutsuwada welcomes Macau’s recent economic developments and
apparently bright future. But as a longtime resident she also hopes
Macau will preserve its historic and religious structures and streets,
as the city center has been designated a United Nations World Heritage
site.

“I sort of miss the quiet atmosphere of Macau of the past. Of
course (economic) development is important. But I wonder what future
direction Macau is moving in, and I feel it’s a pity the old atmosphere
has been vanishing.”