Sunday, August 27, 2006

Virtual gambling in Myanmar's drug country

By Michael Black and Roland Fields

MONG LA, Shan State - 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 currently 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 now 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 saw a
newly built casino sitting completely 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 for scores of remote Chinese gamblers to play their hands.
In the center of the room sits a giant Buddha statue, 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
casino 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 inside 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 opt to have winnings wired to his account or alternatively
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 per 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.


Sai Leun has a long history of risking life and limb. Prior to 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 Lieutenant-General
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 has claimed 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 recent
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

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."

Michael Black and Roland Fields are freelance journalists based in Chiang
Mai, Thailand.

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