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The dark side of China's Las Vegas
By David Edmonds
BBC News, Macau

Macau has overtaken Las Vegas as the world's biggest casino draw but behind the bright lights lies murky tales of money laundering and espionage.

Income in Macau is growing at a staggering 40% a year

It feels like you are stepping into the pages of a Graham Greene novel.

A seedy, shadowy, corrupt world, with a dash of Catholicism and a generous sprinkle of greed.

Less than an hour's jetfoil ride from energetic Hong Kong, Macao is altogether more laid back, more languid, more fun.

The main source of fun for most people is, of course, the casino.

Macao is minute - everywhere is walking distance.

But amazingly this slither of land has just overtaken Las Vegas to become the world's most lucrative gambling centre.

The big boys from Las Vegas are betting that it is only going to get bigger.

Since the Portuguese left in 1999 the gambling business has been shaken up.

Previously it was the monopolistic preserve of the colourful, now-octogenarian billionaire Stanley Ho - known here as Uncle Stanley - who, as well as amassing an ever-expanding casino portfolio, acquired 17 children by four wives.

Vegas brand names Sands and Wynn have now moved in.

In the next couple of months the mammoth Venetian hotel will open a cathedral to uber-kitsch, replete with canals and singing gondoliers.

Entertainment centre

Mainland Chinese flood across the border to the casinos
The unprecedented growth in Macao is driven by three factors: the mainland Chinese are getting richer, they can now cross the border on individual visas, rather than in organised tours. Last year, 12 million flooded in - and their favourite pastime is gambling.

This tiny toenail at the foot of China is fast becoming the mainland's playground.

The new casinos promise family entertainment, restaurants and live acts: not just dice and slot machines.

You have to descend into the bowels of the oldest casino, the Lisboa, to see how things used to be - except you cannot see much.

The men, tightly packed around baccarat tables, are all puffing away, collectively creating wafting clouds of smoke.

The good news is that there is now full employment - indeed, there will soon be a scarcity of croupiers.

But not everyone is delighted by the chip revolution.

Casino casualties

In the heart of town off a quiet square, is a Catholic charity run by a softly-spoken, earnest middle-aged man, Paul Pun.

He is based in a dingy, run-down building, which is the antithesis of neon glamour.

Nearby are some elegant colonial houses with their pastel-shaded roofs.

Lose your shirt on the spin of a roulette wheel, and the authorities might suggest you pay Mr Pun a visit.

Every time she tries to talk she bursts into tears

Mr Pun, charity worker

Mr Pun and his people offer counselling and enough money for the ferry ride home.

"We're getting busier every year," he says.

He points to the next door room. "There's a woman in there, a factory owner from the mainland. She's just lost $100,000 - that's nearly £50,000. We want to speak to her, but every time she tries to talk she bursts into tears."

Mixed up with the betting is the money laundering.

The system works roughly like this: an apparatchik on the mainland demands a bribe from a businessman for, say, the granting of a licence.

The official goes to Macao where his bribe - a fat pile of chips - awaits him.

He squanders some on a game of baccarat, cashes in the rest and back in the mainland explains away his new found wealth by boasting of his success at cards.

One senior Hong Kong analyst told me that over a billion pounds a year is laundered this way.

Nuclear concerns

I am here to investigate a dubious family bank, Banko Delta Asia (BDA) - part of yet another murky Macao tale.

The US claims North Korea was using the bank for illicit purposes

The United States has effectively shut BDA down, after claiming that North Korea was using the bank for illicit purposes.

The North Korean regime is outraged. Whether or not it agrees to halt its nuclear programme may rest upon the fate of BDA.

Mr Joe Wong is spokesman for BDA - a risible misnomer really since he does not speak.

He will not answer our calls. He is always in a meeting.

When we visit the bank in person we are ejected by a burly Filipino security guard as soon as we mention his name.

We wait outside and eventually spot him.

"Mr Wong, Mr Wong - has BDA ever been used to launder North Korean money?"

He looks aghast: "Can't talk, can't talk - I have a meeting."

Then we never see him again.

The link between the hermetic Stalinist state of North Korea and louche Macao is surely the strangest in international politics.

But ever since 1974, when Portugal's fascist dictatorship fell and the new socialist government recognised North Korea, the North Korean elite have used this former Portuguese outpost as their gateway to the world.

It is through Macao that it imports its flat screen TVs and, we are told, President Kim Jong Il's caviar.

Macao, it is alleged, has been used by North Korea to channel its counterfeit cigarettes and counterfeit US dollars.

Until the Americans began to target this place, it was said to be peppered with North Korean spies.

Hong Kong has long prided itself on its rule of law.

Macao, its near neighbour, might be better known for its espionage, money laundering, casinos and dubious bank, but in an odd way, that is all part of its allure

"Income in Macau is growing at a staggering 40% a year"
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