The men from Las Vegas take a gamble on Macau

The former Portuguese colony has imported American expertise to help it cash in on China's wealth and love of games of chance. Jasper Becker reports from Macau

With their bodyguards and bullet-proof limousines, Nevada's multibillionaires - men such as Steve Wynn and Sheldon Adelson, who transformed Las Vegas with their grandiose visions - are cruising the quaint lanes of old Macau. According to Wynn, whose Las Vegas interests include such glamorous palaces as the Mirage, Treasure Island and Bellagio, Macau is among the greatest business opportunities of all time.

With their bodyguards and bullet-proof limousines, Nevada's multibillionaires - men such as Steve Wynn and Sheldon Adelson, who transformed Las Vegas with their grandiose visions - are cruising the quaint lanes of old Macau. According to Wynn, whose Las Vegas interests include such glamorous palaces as the Mirage, Treasure Island and Bellagio, Macau is among the greatest business opportunities of all time.

The sleepy 500-year old Portuguese enclave at the southern tip of China is about to be transformed, much to the delight of the locals. "We need competition here," said a taxi driver.

The first of many American investments in Macau opens this year when Sheldon Adelson's Las Vegas Sands Inc unveils its new casino. The scaffolding is still up but eventually there will be 288 table games and 500 slot machines.

Mr Adelson also plans a second project, a complete replica of his Las Vegas Venetian Hotel Casino and a cluster of resorts, which will be built on reclaimed land. At the original Venetian, gamblers can take a gondola along a fake Grand Canal or visit Madame Tussauds on the way to the 2,500 slot machines and 122 tables.

In an interview with the Las Vegas Review-Journal, Steve Wynn said he wanted to build a destination resort and not just a gambling hall. Macau boasts just one Crazy Horse nude revue to entertain gamblers, but the Americans think they could do better by bringing in the likes of the Las Vegas standbys Cher and Tom Jones.

Mr Wynn is committed to investing $556m (£300m) over seven years and is building Wynn Macau on a 14-acre site scheduled to open in 2006. "The energy, the vitality, the explosive power of the [Chinese] marketplace has to be seen to be believed," he said.

Three American casinos won concessions in Macau and are now investing billions in new casino projects. (The third is the Galaxy Resort and Casino.) They and the Macanese are betting that China's new urban rich will swarm here to indulge the national passion for games of chance.

Across Asia everyone else has been having the same thought. Mongolia and North Korea have opened casinos hoping to lure Chinese gamblers. Singapore has also just announced plans to build a resort and casino on Sentosa, one of its southern islands, which will be linked by a cable car and bridge.

Gambling is banned on the mainland apart from buying lottery tickets, but some reckon there is an underground gambling market in mainland China which is already worth at least $20bn (£11bn) a year.

Outside China government officials are the most enthusiastic about encouraging gambling because it featherbeds many budgets and finances no end of pork barrel projects. Macau's 450,000 citizens benefit from free education, healthcare, and social security - all provided by a gaming industry which provides 70 per cent of government revenues, accounts for a quarter of GDP and employs 5 per cent of the workforce.

The freedom to gamble on horse-racing brings in 11 per cent of government revenues in Hong Kong at a time when it is running record deficits and high unemployment. Last year it legalised football betting because, experts said, in Hong Kong alone $1.5bn a year was gambled illegally on football matches, often via the internet.

Macau started specialising in casinos in 1872 when the British banned gambling in Hong Kong. To make it easier to collect tax revenues, the industry was consolidated under the control of one man in the 1960s, making Stanley Ho among the richest Chinese in the world, with a net worth estimated at $2.8bn. Often referred to as Sun Gor, or Big Brother Sun, he controls Sociedade de Turismo e Diversoes de Macau (STDM), an umbrella company for many of his holdings.

Stanley Ho, 83, arrived in Macau with just a dollar in his pocket and started work as a lowly clerk in a Japanese-owned import-export firm. He was born into a distinguished Hong Kong family and fled after Hong Kong fell to the Japanese in 1941.

He now runs a dozen casinos, including his tacky-looking Lisboa which rakes in some $3bn a year, but he also controls the horse and greyhound races, plus the jetfoils, the helicopters, the toll bridge and part of the new airport which brings gamblers from Hong Kong and the rest of Asia. The profits have been ploughed into banking, real estate and other ventures, including a string of hotels in Canada, where he is known for making big donations to Canadian political parties.

When his first wife, a famous Portuguese beauty, Clementina Angela Leitao, died last year at the age of 80, she was given the equivalent of a state funeral. Big Brother Sun is said to have been comforted by the support of a close family of 17 children from three other wives.

Macau, for so long the poor relation to its ancient rival Hong Kong, is for once doing much better. The government is flush with gambling revenues and is spending its money on unnecessary infrastructure projects, including draining the marshes between the mainland and the outlying islands. One of the latest infrastructure projects is the Macau Tower, costing $120m, which at over 1,000ft will be among the highest buildings in the world.

But Stanley Ho is by no means Macau's most famous resident. That title is claimed by Wan Kuok-koi, aliasBroken Tooth, another penniless migrant who created a commercial empire. Wan Kuok-koi is serving multiple prison terms in a high-security cell in Macau's only prison on Coloane Island.

A murderous psychopath who started a gang war in the mid-Nineties in which 34 people died, Broken Tooth claimed to be head of the 14K Triad. Now 47, he became an international celebrity in the mid-Nineties when he boasted of his crimes to local tabloid journalists. Three senior members of Kuok-koi's gang were gunned down in a Chicago-style street slaying in May 1997, a motorcycle gunman tried to kill Lieutenant-Colonel Manuel Antonio Apolinario, Macau's top gambling inspector, in November 1996, and a bomb destroyed the car of Antonio Marques Baptista, the judicial police director.

Kuok-koi's connections to the real triads seems shrouded in doubt and he seems to be have been nothing more than a streetfighter with two years of schooling who moved into loan-sharking, trading in junket chips that were not redeemable for cash, "handling" of high-stakes gamblers, protection rackets and the sale of counterfeit goods.

The real triads started in Fujian, on China's south-eastern coast, as a political movement, and used a triangle as their symbol, representing mankind, earth and heaven. They arrived in Macau just before the collapse of the Manchu dynasty in the early 1900s, when the enclave became the base of anti-Manchu movements, including those organised by Sun Yat-sen, the founder of the Republic of China and the Nationalist Party, the KMT.

Kot Siu-wong, a Nationalist army lieutenant-general, set up 14K in the 1940s across the Chinese border, in Guangdong province, as an anti-Communist group named after the address of its headquarters (house number 14) and the initial of its founder's surname. After the Communist victory, 14K members fled to Hong Kong, Taiwan and Macau, where they gradually shed their political ideals and mysterious initiation rituals and became gangsters.

Macau's authorities first tangled with the triads in 1949, when Joao Maria Ferreira do Amaral, the Portuguese governor, had his head cut off for levelling their ancestors' graves.

The Portuguese believe Kuok-koi and his followers borrowed the triad name to intimidate their victims and inflate their status. The true number of triad members was probably not much more than a thousand, but the influx of mainlanders destroyed the status quo. Half the population has arrived in the past 20 years.

Kuok-koi seized the leadership of the local gangs from "Touch Hair" Peng, who fled the enclave after being sentenced in his absence to 23 years' imprisonment for murder. Kuok-koi believed he could challenge the weak Portuguese administration, threaten Stanley Ho and gain control of the territory before it was returned to China.

The Portuguese administration enacted legislation against organised crime in 1997 and arrested about 1,700 suspects, eventually sentencing several hundred. in China, police carried out a crackdown which netted 35,000 suspected criminals. The violence ended and Macau is now safe, and the gamblers have returned.

In 1999, the enclave was formally handed back to China and became the second Special Administrative Zone after Hong Kong. Two years after the new administration took charge, Macau ended the monopoly of Stanley Ho, confident that visitor numbers would soon double to about 20 million year and gambling taxes would double.

Beijing is now allowing ever larger numbers of mainland Chinese to travel on individual visas at will. The new policy is one of a series of measures to help stimulate Hong Kong's flagging tourism, lift property and share prices and help to boost the popularity of the government of Tung Chee Hua, the chief executive. Hong Kong is gambling that its future as a tourist destination will be sealed when the first Disneyland in China opens in 2006.

Macau also decided it needed to rely on American know-how to create the right cultural attractions. Mainland visitors to Las Vegas are now rivalling the Taiwanese and Japanese and are among the biggest spenders. They disdain the slot machines and prefer fast, high-risk card games such as baccarat.

Stanley Ho's casinos certainly looked drab and in need of investment. In the afternoon of a weekday, the Lisboa looked plain and run-down, with most of the customers middle-aged women mechanically pulling the slot machines. In the basement, willowy girls from across the border dressed in diaphanous black outfits strut up and down looking for customers and say they start work even before the banks open. (Prostitution is not illegal in Macau.)

Even so, around the roulette tables mainland visitors stand five deep, fascinated by the chance to do what has been forbidden for half a century in China.