Age of Ambition (13 page)

Intrigue, of one kind or another, had clung to Macau since the city's founding myths, which described an act of elegant deception: In 1564, or so the story went, local Chinese fishermen sought the help of a visiting Portuguese fleet for a battle against pirates; the Portuguese disguised their cannon inside Chinese boats and waylaid the bandits at sea. In gratitude, the Chinese granted permission to the Portuguese to stay on the peninsula. Macau became a vital stop between India and Japan, but eventually nearby Hong Kong built a better port, and Macau had to find alternative specialties: opium, prostitution, and gambling. When the Dutch-born writer Hendrik de Leeuw visited in the 1930s for his book
Cities of Sin
, he included Macau as home to “all the riffraff of the world, the drunken shipmasters; the flotsam of the sea, the derelicts, and more shameless, beautiful, savage women than any port in the world. It is a hell.”

For most of its history, Macau looked as much Mediterranean as Chinese, with baroque Catholic churches and rows of cafés shaded by drooping palms, where old émigrés sipped
cafe da manhã
over the
Jornal Tribuna
. But by the time I arrived, it had a touch of the Persian Gulf: air-conditioned luxury hotels and high-rises, with sports cars idling in the sunshine. Government tax revenue in Macau was often more than double the budget, and like Kuwait, Macau distributed checks to its residents under a program named the Wealth Partaking Scheme. Unemployment was below 3 percent. “What Las Vegas did in seventy-five years, we are doing in fifteen,” Paulo Azevedo, the publisher of
Macau Business
and other local magazines, told me when we met for a drink. That pace had left the city short of many things: taxis, roads, housing, medical services. “For dental, I have to go to Thailand,” Azevedo said. One month, Macau came close to running out of coins. The casinos had reordered the rhythms of life and work, in ways that were not universally celebrated. Au Kam San, a member of Macau's Legislative Assembly, who worked as a high school teacher, had students who told him, “I can go get a job in a casino right now and earn more than my teacher.”

A short drive from the ferry, the Las Vegas tycoon Steve Wynn had a complex with two hotels, where the Louis Vuitton store was said to generate more sales per square foot than any other Louis Vuitton store worldwide. Walking past a tank of luminescent jellyfish, which required a specially designed curtain to sleep at night, the casino PR person who was showing me around told me that Chinese clientele demanded a heightened level of luxury because “everyone is a president or a chairman.” We stopped into the complex's newest Michelin-starred restaurant, which had an in-house poet who wrote a personal verse for every VIP. I asked a waitress why there was a tiny white leather stool beside each table, and she said, “That's for your handbag.”

A generation ago, families buried their jewels in the backyard to avoid political persecution. By 2012, China had surpassed the United States as the world's largest consumer of luxury goods. Though the Chinese had no nostalgia for the days of deprivation, they wondered how single-minded acquisitiveness might be changing them. A joke making the rounds described a man on a Beijing street corner who is sideswiped by a sports car, which tears his arm off. He gazes in horror at the wound and cries, “My watch!”

Macau always reminded me of the American Gilded Age. Matthew Josephson, author of
The Robber Barons
, describes how Americans acclimated to sudden fortune in the 1870s. One man, he writes, “had little holes bored into his teeth, into which a tooth expert inserted twin rows of diamonds; when he walked abroad his smile flashed and sparkled in the sunlight.” The American political system at the time was subject to criticisms similar to those facing China's political system today: corruption, lack of rule of law, weakness in the face of corporate monopolies. When strikes and demonstrations raged across the United States in the 1870s and '80s, they were met with force. Give the strikers “a rifle diet for a few days,” suggested Thomas Scott of the Pennsylvania Railroad, “and see how they like that kind of bread.” Europeans liked to say that America had gone from barbarism to decadence without the usual interval of civilization.

Macau afforded China's new moneyed class the chance to indulge. In designing his casino, Steve Wynn celebrated Chinese superstitions about the path to fortune: when the hotel designers realized that the number of private rooms in the spa was four—an unfortunate number, because it sounds, in Chinese, like “death”—they installed a line of fake doors across the hall to suggest a total of eight, a word in Chinese that sounds like “get rich.” In Las Vegas, Wynn had made his name pushing luxury over camp—Picassos over Wayne Newton—but his hotel in Macau still used what casino designers called the “wow feature.” Once an hour, tourists gathered in the lobby to watch a hole open in the floor. A giant animatronic dragon climbed out, coiling into the air, red eyes blazing, smoke pouring from its nostrils.

*   *   *

The City of Dreams smells of perfume, cigarettes, and rug shampoo. Chinese gamblers rarely drink when money is on the line, and the low, festive hum is broken now and then by the sound of someone pounding the table in delight or anguish, or exhorting the cards to obey. One night, I settled into the scrum around a baccarat game in which a slim man with heavy eyebrows and a red face shining with sweat was performing “the squeeze”: slowly peeling up the edge of his card, while the man beside him shouted “Blow! Blow!” to wish away the high numbers that would make him lose. When the slim man had peeled enough to see the digit, his face twisted in disgust and he tossed the card across the table.

“Americans tend to see themselves in control of their fate, while Chinese see fate as something external,” Lam, the professor, said. “To alter fate, the Chinese feel they need to do things to acquire more luck.” In surveys, Chinese casino gamblers tend to view bets as investments and investments as bets. The stock market and real estate, in the Chinese view, are scarcely different from a casino. The behavioral scientists Elke Weber and Christopher Hsee have compared Chinese and American approaches to financial risk. In a series of experiments, they found that Chinese investors overwhelmingly described themselves as more cautious than Americans. But when they were tested—with a series of hypothetical financial decisions—the stereotype proved wrong, and the Chinese were found to take consistently larger risks than Americans of comparable wealth.

I had come to expect that Chinese friends would make financial decisions that I found uncomfortably risky: launching businesses with their savings, moving across the country without the assurance of a job. One explanation, which Weber and Hsee call “the cushion hypothesis,” is that traditionally large Chinese family networks afford people confidence that they can turn to others for help if their risk-taking does not succeed. Another theory is more specific to the boom years. “The economic reforms undertaken by Deng Xiaoping were a gamble in themselves,” Ricardo Siu, a business professor at the University of Macau, told me. “So people got the idea that taking a risk is not just okay; it has utility.” For those who have come from poverty to the middle class, he added, “the thinking may be, If I lose half my money, well, I've lived through that. I won't be poor again. And in several years I can earn it back. But if I win? I'm a millionaire!”

China's prevailing approach to risk reminded me of Lin Yifu, the defector from Taiwan, who had placed his bet on the new China. Though his journey was more dramatic than most, his decision had something in common with that facing any migrant who sets off in search of better prospects—Gong Haiyan and her online dating business, or the students at Crazy English, or, for that matter, the European immigrants who came to America during the Gilded Age.
What do you want to be, and what will you pay to be it?

In the case of Inveterate Gambler Ping, success and risk-taking drew attention. Four months into Siu's streak, a gossip column in the
Apple Daily
, a popular Hong Kong paper, took note of a “mysterious” figure making the rounds in Macau, said to be amassing a fortune as large as 150 million dollars. “Is he extremely lucky or does he have the genuine magic touch?” the paper asked in January 2008. The next day, a member of Hong Kong's legislature, Chim Pui-chung, a devoted gambler, told the paper that he had heard people hailing the new high roller as the “God of Gamblers,” borrowed from the title of a Hong Kong movie starring Chow Yun-fat. Professional gamblers had a name for guys like that: “shooting stars,” because they came out of nowhere, and usually vanished just as fast.

A hot streak of that scale was guaranteed to attract suspicion. Casinos know that their advantage in baccarat (about 1.15 percent) ordains that the chances of winning all but evaporate for a gambler after thirty thousand hands. A dedicated player might draw a thousand hands in a weekend and come out ahead, but after seven months almost nobody should be going home a winner. Not long after the article appeared dubbing Siu the God of Gamblers, his twenty-year-old son received a series of anonymous threatening phone calls. Then one night someone slipped into Celebrating Fortune village and set part of the family house on fire. Finally, Siu's friend Wong Kam-ming, who had introduced him to the VIP rooms, received an angry call. The man on the other end demanded a meeting to discuss the question of Inveterate Gambler Ping's having cheated.

*   *   *

For years nobody embodied the spirit of Macau more than Stanley Ho, a tall, elegant tycoon who dated starlets and dancers, excelled at the tango into his eighties, and was chauffeured around Hong Kong in a Rolls-Royce with the license plate HK-1. After his father lost the family fortune in the stock market, Ho got his start during the Second World War with a trading company in Macau. “By the end of the war, I'd earned over a million dollars—having started with just ten,” he said later. He expanded into airlines, real estate, and shipping, and in 1962 he and his associates took over Macau's casinos, gaining a monopoly that lasted forty years and made him one of Asia's richest men. Foreign governments suspected Ho of being too cozy with Chinese organized crime. He denied it, but regulators thwarted his family's efforts to run casinos in the United States and Australia. In keeping with the spirit of his city, he was nonjudgmental in his choice of business partners; he ran horse racing under the Shah of Iran, a gambling boat under Ferdinand Marcos of the Philippines, and an island casino under Kim Jong-il. Intelligence agents were desperate to cultivate Ho for his connections, but the late Dan Grove, a retired FBI agent who served in Hong Kong, told me, “Nobody ever got past first base.”

Stanley Ho's Macau monopoly expired in 2002, and foreign competitors surged in to obtain licenses. The first new casino to open was the Sands Macao, backed by Sheldon Adelson, of Las Vegas, whom
Forbes
ranked as the ninth-richest person in the United States. Adelson was Stanley Ho's physical opposite—small and heavy, with electric red hair. The son of a cabdriver from Lithuania, Adelson grew up in Boston's Dorchester neighborhood and ran a spate of businesses—packaging toiletries for hotels, selling a chemical spray to clear ice from windshields—before his big break, in 1979, when he launched COMDEX, a computer trade show. He later bought the old Sands hotel in Las Vegas, created America's largest privately owned convention center, and enriched himself by pairing casinos with exhibition centers. Adelson had coveted Macau as a gateway to 1.3 billion Chinese nationals, and he successfully courted Chinese leaders in Beijing by emphasizing his influence in Republican politics. (He was the single largest individual donor in the 2012 presidential campaign.) In May 2004, he opened his first casino and then embarked on an idea that he described as coming to him in a dream: to replicate the Las Vegas Strip on a stretch of open sea between two islands in Macau. His company constructed a landfill out of three million cubic meters of sand and opened the $2.4 billion Venetian Macao, a supersize replica of the Las Vegas Venetian, with the largest casino floor in the world. He told people that he hoped Macau would someday allow him to overtake Bill Gates and Warren Buffett in wealth.

Unlike Las Vegas, where most of the profits came from coins fed into slot machines, three-quarters of the revenue in Macau was derived from enormous bets made in VIP rooms, where high rollers played around the clock. Casinos relied on Chinese companies known as “junkets,” which existed to solve some of the practical problems of running a casino in Macau—namely, that Chinese law barred them from trying to collect gambling debts in the People's Republic. Working through junket operators was a legal bypass around this problem, because the operators could recruit rich customers from across China, issue them credit, and then handle the complicated business of collection. The system was especially attractive to customers who needed to get large quantities of cash out of China. If a corrupt official or executive wanted to hide the proceeds, a junket was a way to hand over cash on one side of the border and recover it on the other, in chips that could then be played and cashed out in clean foreign currency. (Another option was to smuggle it by hand across Macau's relaxed borders, a practice known in laundering circles as “smurfing,” named for the fictional blue characters, a reference to the army of small-time couriers involved.)

While the junket industry had many law-abiding members, it had been, for decades, susceptible to the involvement of organized crime. In China, organized crime groups known as “triads” grew out of nineteenth-century political societies; the term
triad
is believed to have originated when three groups merged into a powerful organization. They became involved in loan-sharking and prostitution, and made their presence felt at Macau's casinos, but in recent years triads had become more business-oriented. They set aside squabbles over drugs and petty crime in order to pursue new criminal opportunities associated with a more prosperous People's Republic, including money laundering, financial fraud, and gambling. Gangsters were becoming “gray entrepreneurs,” as criminologists put it, and it was growing more difficult to distinguish between triads that had gone into business and businesses that were acting as triads. Men who were once known in the local papers by their nicknames, as reputed triad bosses, reinvented themselves as executives in the gaming industry.