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Sunday, Feb. 4, 2007

TOURISM, GAMBLING, NORTH KOREAN MONEY

Japanese interest in Macau reaches new heights


Staff writer

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
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."



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The Japan Times Feb. 4, 2007



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