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Virtual gambling in myanmar’s drug country

By Michael Black and Roland Fields in Mong La
28 August 2006 17:15
Reincarnated casinos in Shan State prosper as the junta plans an economic overhaul

A casino in Mong La, a short distance from the Chinese border. Every day thousands of Chinese come to this remote town to gamble.
Myanmar’s jungle casinos are open for business again, only this time with a new media twist that allows casino owners to dodge an official ban on their operations and Chinese gamblers to play for even higher stakes without leaving their homes.

Welcome to the latest incarnation of Mong La, Myanmar’s low-grade rendition of Las Vegas and a recurring irritant in China-Myanmar relations. Situated opposite the town of Dalou in China’s Yunnan province, Mong La in the 1990s established itself as a Chinese tourism hub for gambling, prostitution and transsexual cabaret shows – not to mention rampant money-laundering, western officials contend.

Located in Myanmar’s Special Region No 4, the jungle town quickly emerged as a sinkhole for unknown billions of Chinese yuan, including funds pilfered by corrupt Chinese government officials, ill-gotten gains from Yunnan-based organized crime syndicates, and the honest earnings of hardcore gamblers.

In January 2005, the town’s many flashy casino-hotels were closed down after Beijing, irked by reports of corrupt officials squandering state funds on Myanmar gaming tables, banned their officials and citizens from traveling to Mong La.

According to people familiar with the situation, China briefly sent a small number of troops into the remote region to enforce the travel ban and pressure casino operators to close down their operations. At one point, Chinese officials threatened to cut Mong La’s power supply, which is provided by Yunnan-based electricity generators.

That hasn’t deterred Lin Mingxian, more widely known by the alias Sai Leun, the town’s overlord, who commands a 2,000-3,000-strong militia known as the National Democratic Alliance Army (NDAA). Sai Leun is believed to have financed much of the city’s gambling infrastructure in the late 1990s from cash he allegedly earned in the narcotics trade.

The militia leader is aggressively expanding his enterprise into online gaming, a fast-growing multibillion-US-dollar global industry that is just now catching on in China. On April 27, Sai Leun presided over the opening of seven new internet-enabled gambling facilities, specifically designed and outfitted for online China-based gamers. Another 14 gambling venues are being carved out of the jungle about 16 kilometers southwest of Mong La, set idyllically among paddy fields and wandering water buffalo.

Asia Times Online recently gained a rare on-the-ground glimpse into the inner workings of Mong La, arguably one of the most lawless areas of Southeast Asia. After traveling in a casino owner’s luxury sedan, with Chinese hip-hop music blaring over the radio, down a winding dirt road outside of Mong La, ATol arrived at a newly built casino surrounded by tropical forest.

Inside the two-story stucco-encrusted building, black leather chairs sit around immaculate baccarat tables while dead jungle bugs litter the otherwise spotless new red carpeting. Suspended above the tables are cameras connected to the internet, which allow scores of Chinese gamblers to play their hands. In the center of the room sits a giant Buddha image, which placidly overlooks the entire operation.

Mong La’s new casinos are a curious twist on western-style online gaming, which is conducted solely in cyberspace. From the comfort of their homes in Beijing, Kunming or Shanghai, Chinese gamblers watch the tables via a live video feed over the internet and place their bets through agents on location at the jungle casinos. The arrangement, says the casino operator, allows the players and operators to circumvent recent Chinese efforts to prevent the outflow of cash into Myanmar’s black markets.

The transactions also entail a measure of trust. Online players in China transfer funds into the casino operators’ China-based bank accounts. Once the transfer is confirmed, a player logs on to the casino’s website and watches the game from the cameras above the tables via high-speed internet while communicating with his agent via mobile phone. When the hand is played out, the remote player can have winnings wired to his account or order the agent to get the cash physically from the casino.

One of the casino operators who spoke with Asia Times Online claimed to be able to cover up to US$1 million in bets in this fashion a day. New online casinos recently opened at nearby Wan Hsieo, Mong Ma and the tract outside Mong La are able to handle similar financial traffic, meaning total daily turnover at Myanmar’s online casinos could hit $20 million, depending, of course, on how the cards are played. The operator said investors in mainland China, Hong Kong and Thailand had contributed funds to the new casinos.

Risk-taker

Sai Leun has a long history of risking life and limb. Before becoming chief of Semi-Autonomous Region No 4, he was commander of the Communist Party of Burma’s 815 War Zone and was widely viewed as one of the communists’ ablest field commanders. He joined the CPB as a Red Guard volunteer in 1968 alongside Wa leaders Bao Yuxiang and Li Ziru.

After the breakup of the CPB in 1989, communist-held territory was divided into so-called special regions, each with its own military and political wings. The Myanmar generals, led then by military-intelligence chief Lt-Gen Khin Nyunt, brokered ceasefire agreements with the militias, allowing them a large measure of local autonomy over their territories.

As such, the remote regions blossomed into major opium-production and heroin-refining hubs, affording the region’s leaders massive profits on the illicit-drug trade. For his part, Sai Leun claims to have changed his drug-trafficking ways and in the late 1990s declared his area of Special Region No 4 a “drug-free zone” with Dennis Hastert, Speaker of the US House of Representatives, senior United Nations officials and senior Myanmar generals at his side.

Mong La’s resurgent gambling operations have coincided with an improvement in Sai Leun’s health, which deteriorated rapidly after a series of alleged strokes that coincided with China’s armed intervention at Mong La and more pressure from Myanmar’s ruling junta to disarm his militia. Sai Leun is immensely popular in his autonomous area, in part because of his unilateral decision to exempt locals from paying taxes. He reportedly said during the April 27 opening of the new casinos, “The only burden you will continue to bear is supplying us with new recruits for our army.”

The junta’s new calls to disarm Sai Leun’s NDAA forces have also raised concerns with the neighboring and allied 20,000-strong United Wa State Army (UWSA), the world’s largest narcotics-trafficking militia, which relies heavily on trafficking routes in Sai Leun’s territory to move its contraband out of Myanmar.

An official in Mong La characterized the relationship between the NDAA and the UWSA as “not like brothers but like friends.” This friendship is evident in the UWSA troops who guard and protect many territories around Mong La and the many luxury vehicles in the town that sport license plates marking them as from UWSA territories. A junta move against Sai Leun could enflame new armed conflict in the area, his supporters contend.

At the same time, Sai Leun has taken precautions against future disruptions to his gambling businesses – particularly from China. To preempt a possible power cut from China, he ordered the construction of a power plant in a converted sugarcane refinery, which became operational one year ago and is capable of independently supplying 30,000 kilowatts of power, well beyond the town’s current needs. Mong La’s telecommunication infrastructure, however, is still controlled by China, which could represent a pressure point on the casino’s Internet connections.

China is still the sole importer of the remote region’s rubber and other commodities and, judging by local markets, the local economy is increasingly reliant on imports of cheap Chinese manufactures. Sai Leun, casino operators reckon, has negotiated assurances from Yunnan officials against another Chinese crackdown on his new-fangled gambling operations. However, a Wa official who spoke with Asia Times Online in early June was less confident, saying, “The Chinese can change their mind at any time.”

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