Macau becoming Las Vegas and the end of the Macau Jockey Club
The Asian Crime Century briefing 56
(Macau Racecourse, Source: Alamy)
The journey of Macau to eradicate organised crime from the city took another step forward last week when the local government announced that the Macau Jockey Club (MJC) will close from 1st April. Although the government and also the MJC management stated publicly that the cessation of horse racing and betting in Macau was due to financial reasons, the failure of these activities for multiple decades is another example of how criminal interests have dominated and profited from Macau gambling monopolies. The decision by the Macau government to end horse racing in Macau is another part of eradicating organised crime in Macau and for the city to become more like Las Vegas.
Horse racing in Macau has a long history, possibly dating back to the 17th century. Horse racing by the 20th century century involved amateur races held in the Areia Preta (“black sand”) in a hippodrome completed in 1924, located near the Barrier Gate north of the Macau city walls. The first race at the Macau Hippodrome was reportedly held in March 1927 by the Man Kok Horse Racing Sport Club.
(Macau Hippodrome, circa 1924, Source: Memoria de Macau)
In 1980 Yip Hon, the former partner of Stanley Ho, established the Macau Trotting Club on Taipa Island. Trotting, also called “harness racing”, involves a single horse pulling a two wheeled cart that carries a single driver racing against others. The Macau Trotting Club was not a financial success and closed in 1988. The club was sold to Taiwanese investors, which involved a major fraud.
In 1989, the ‘Zhenwei Investment Company’ (established in 1987) bought the Macau Trotting Club from Yip Hon and created a new ‘Compania De Corridos De Cavalos De Macau SARL (‘Macau Horseracing Company’). The Taiwanese company defrauded at least NT 18 billion (US$570 million) from small investors in Taiwan who were sold stock certificates for 20 million shares in the ‘Macau Horseracing Company’. Around 30,000 investors reportedly lost money to the fraud, which allowed the Zhenwei Investment Company to purchase all of the shares in the Macau Trotting Club from Yip Hon. The principal of the company absconded with the funds, leaving tens of thousands of Taiwanese with a loss of their investments. The Taiwanese ‘Macau Horseracing Company’ only lasted one year and closed in 1990.
(Macau Horseracing Company stock certificates, Source: Mobile 01)
In 1991, casino tycoon Dr. Stanley Ho led a consortium to purchase the club for 400 million patacas (around US$ 50 million) and registered the Macau Jockey Club. Stanley Ho imported new horses and commenced flat racing in Macau. The MJC was remarkably successful, largely because it focussed on betting on horse racing by people in neighbouring Hong Kong. By 2003, the MJC had 1200 horses in training, ran over 1,200 races per year, both more than neighbouring Hong Kong, and had betting turnover of over MOP9 billion (US$1.1 billion).
However, despite the golden touch of Dr. Stanley Ho there were hidden criminal interests in Macau that exploited the success of the MJC. The huge illegal bookmaking (betting on horseracing) in Hong Kong, Macau, and across the border in Guangdong Province made the MJC a prime target for criminals who needed legitimate platforms for their illicit business.
In 2004, the Organised Crime & Triad Bureau of the Hong Kong Police raided the offices of Onshine Securities Ltd. in Hong Kong and seized the company accounts. The directors of Onshine Securities included Angela Leong On-kei (the fourth wife of Dr. Stanley Ho) and Li Chi-keung, both of whom were also directors of the MJC.
In April 2010, Yeung Chun Pong, a shareholder of Onshine Finance, a company that was part of the Onshine Group, pleaded guilty to laundering the proceeds of HK$400 million (US$51 million)
received from illegal bets on MJC and Hong Kong Jockey Club horse races between 1998 and 2000. When interviewed by the Hong Kong Police, Yeung Chun-pong said that there was a need for special services to gamblers “As they lose so much money, they need a bit of cocaine and some hookers to make them feel better.” The case showed how criminals were using a company operating in Hong Kong to launder money from illegal bookmaking whilst at the same time being involved with the MJC.
By 2023, the MJC was in a pitiful state having accumulated operating losses exceeding MOP2.5 billion (US$310 million). Closure was inevitable. The closure of the MJC may be primarily due to the financial disaster that the operators have managed to create, but it also marks another milestone in the surgical removal of organised crime and their business opportunities from Macau. The authorities have already taken action against several casino junket operators, both linked to money laundering from Mainland China. The criminal cases pursued by the Macau as well as the Mainland authorities have sent a strong signal that the environment must change. The long term over-reliance on casino gambling with junkets and VIP rooms, and the inevitable related organised crime involvement, has to stop.
Macau is becoming like Las Vegas, with less reliance upon casino gambling and more emphasis on non-gaming revenue. In Las Vegas, large casinos now have up to 75% of their revenue from non-gaming business. In Macau, non-gaming revenues averaged only around 5% for major casino operators prior to the Covid-19 pandemic. Considering that the STDM monopoly ended 22 years ago in 2002, it is clear that diversifying the Macau economy will not happen voluntarily. There are too many vested interests involved in the gambling industry in Macau, including many criminal interests. Macau has a long way to go to reach the situation in Las Vegas, but eradicating organised crime from the major businesses in the city is an essential part of this journey.