Whirl Pool episode 11: Casinos & Rules of Engagement

Posted: June 19, 2011 in Uncategorized

Editor: Alan Kaplan has filled readers in with yet another interesting episode on Macau casino insider story.

19 June 2011

Whirl Pool episode 11: Casinos & Rules of Engagement

Story by:  Alan Kaplan


James had returned to his office from the casino floor, after his routine walk-around. The weather was hot and humid in this part of Southern China climate.

Silverstone Casino had opened for more than a year by then. The mass market segment in Southern China region and some of the more affluent cities in northern China (Shanghai, Beijing etc.) were rather well-informed of the latest mega casino in Asia. With the Chinese government opening up mainland individual travels to Hong Kong and Macau, casino business was the largest money-printing machine in the territory (Macau).

But things were not all that rosy for some. The local industries started to hit at the territory’s authority about Silverstone’s bad business practices. The most significant complaint was that the American casino had outsourced most of its logistics to companies outside Macau, such as Hong Kong and China. Most business contracts were given to business partners especially in China. So much so that this practice was soon stopped by Macau authority. The guideline was that only when Macau local companies could not handle contract work specifications then Silverstone was allowed to award contracts to entities outside Macau. You bet, the quality if work/goods & services started to fall apart.

Over time, businessmen in Macau and outside the territory (mainly China & Hong Kong) started to collaborated with each others and formed joint venture subsidiaries in Macau. That would make things less obvious and by then, American casinos could assign almost 90% of contracture works to registered ‘local companies’. Creativity works.

Among the many creative business entities operating in Macau, there’s one particularly stood out. It was one of the portuguese law firm with long history there. The boss of this law firm was known for his courage in town. His name was Benny Arogonza. Once upon a time, Benny was kidnapped by gangs but he never back down. Yet he was eventually saved by the security forces (police). That made Benny famous. He knew who’s who in the ex-Portugese territory and managed to “make all things happen” literary.

Rumours were that Benny was the real guy who helped secured Silverstone’s casino license during the bidding process. Such rumours were plentiful circulating among locals there but of course, like all rumours, never easy to confirm the facts.

What’s interesting in the territory was that various interest groups and business entities were able to ‘sub-divide’ the business pie according to a set of unwritten rules and stay happy with each other. This was one of the great ‘achievements’ after the Chinese government took charge of Macau since December 1999. The Portuguese never achieved that, trying for 400 years on the territory. Triads & gangs were dealt with effectively by the “The People’s Republic of China liaison Office in Macau Special Administrative Region”. A mouth full but it means real business, coupled with a full regiment of PLA army troops stationed in Cotai, Macau.

Just take this example. In Macau, when going round entertaining with clients and business partners, James started to learn that even for Spa and KTV businesses, the gangs had divided the whole logistic of the business into, hardware operators, human supplies (out of China of course), government relations & liaison. Each set of partners (gangs) would “specialized” on one of those elements. Everyone stays within their boundary and creams off their profits. It’s all peace and no war. Far from the Old Portuguese Regime. Anyone who start to upset the mood would soon be sent to outer-space.

Viva Macau!


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