Beijing’s Losing Hand

One recent night shortly before midnight, a steady stream of vans ferried people from a parking lot in this southern town to an industrial area two miles away, near the border with Myanmar.

After passing through the gate of the complex, the vans stopped in front of a yellow building the size and shape of a small airplane hangar. There was little to distinguish it from nearby industrial buildings other than a garish arrangement of pulsing neon flowers near the glass door -- and the nonstop arrival of customers despite the late hour.

Inside, a hall the size of two football fields was jammed with eight banks of roulette tables immediately inside the door, a line of electronic blackjack machines against the back wall and 12 pits to the left for a game called heaven-earth-harmony.

The operators of this large and seemingly prosperous underground casino didn’t appear to have gotten the word that they were under siege by the Communist Party. Embarrassed by recent scandals involving party officials who squandered public money in foreign casinos, Beijing kicked off a five-month anti-gambling campaign in January that officials describe as the biggest in Chinese history.

“We’ve declared war on gambling,” Zhou Yongkang, head of the National Public Security Bureau, said in announcing the campaign. “We must stop the spread of this illegal activity.”

The government has closed thousands of underground betting parlors that were defying the long-standing official ban on gambling (a bit of mah-jongg with friends excepted). It has pressured neighboring countries to shut down their casinos at the border. It set up 24-hour hotlines and websites to report gamblers and tightened rules for officials going overseas.

Beijing has released a blizzard of statistics about the campaign’s effectiveness. Dozens of casinos just across China’s borders are “dying,” according to the official New China News Agency, while 100 have reportedly been driven out of business. Hundreds of thousands of gamblers have been questioned or temporarily detained and tens of thousands have been arrested, most of them released after paying a fine.

Even as the campaign continues, however, some Chinese are quietly lobbying the government for a more “realistic” approach to an activity sometimes described as part of their psyche. They may be making headway with one powerful argument: Allowing gambling would prevent billions of dollars from leaving the country.

“Gambling is a big part of Chinese human nature,” said Hu Xingdou, economics professor at the Beijing Institute of Technology. “Trying to ban it completely is just not going to happen. China also loses an incredible amount of money overseas every year.”

Numerology, superstition and a get-rich-quick mentality are deeply ingrained in the world’s most populous country, particularly in rural areas, sociologists say, and they find expression in gambling. China is also playing catch-up. There’s enormous pent-up demand as people start to enjoy more freedom to travel and spend their money on entertainment, after decades spent under a repressive regime.

The mostly male clientele of the Ruili casino appeared unfazed by the government crackdown as the gamblers intently placed bets through a haze of cigarette smoke. There was no alcohol and almost no small talk. A small crowd gathered as one winner collected three thick stacks of bills totaling about $4,000 and stuffed them into the sequined purse of his female companion.

The building’s interior was bright and clean, with recessed lighting and newly plastered walls. But the gambling machines, chairs and tables were battered, suggesting an operation that has been moved repeatedly on short notice.

“When things get tough, we all go crazy moving everything from here to there,” said one Ruili resident who has worked in local casinos. “But if you have good connections, you can stay in business even when the others are closed down. Don’t worry about this place, even with the crackdown. They have good guanxi,” or connections.

But pit bosses, sporting badges and bulging muscles, weren’t taking any chances. They watched the crowds carefully for trouble and fired questions at any visitor they viewed with suspicion: How did you learn about this place? Where do you come from? What hotel are you staying at?

“Great, I finally won one,” said a gambler placing $5 bets at heaven-earth-harmony, a game in which a pingpong ball is dropped onto a grid, with players betting on where it will land. “It’s about time.”

A businessman from Jiangsu province, who, like many of the gamblers, declined to be identified, said the government crackdown hadn’t deterred him.

“When business is slow, I go every day,” he said, smoking as he rubbed a quarter-sized mole on his right cheek. “Whenever I win, I stop. Over the past few months, I’ve won $2,400.”

Many people are drawn to Ruili, a classic border town where anything goes, because no one asks too many questions. Little more than a road and a few huts when modern China emerged in 1949, it was built up by soldiers to safeguard the country’s southern flank. Much of the town doesn’t get moving until late afternoon, when restaurants, massage parlors and teahouses come to life and then remain open until the early-morning hours.

Zhao Renzhong, 67, a retired soldier living in Ruili, said all but a few of the 20 or so local casinos had been closed in the crackdown. “But as soon as the government crackdown eases, they’ll reopen,” added his friend Wang Yonghua, 51, who runs a small shop selling cigarettes and baijiu, a clear liquor.

Wang isn’t the only one skeptical of the government’s latest push. “We call these campaigns a ‘gust of wind,’ ” said Zhou Xiao- zheng, a sociologist with People’s University in Beijing. “It blows the dust away, but as soon as the wind stops, the dust comes back. The central government aim of halting gambling is totally unrealistic.”

One glaring exception to Beijing’s “people’s war” campaign is Macao, a longtime Portuguese colony that reverted to Chinese rule in 1999. Even as China has cracked down hard on other areas within its reach, it has allowed Macao to aggressively expand its gaming industry.

Gambling has been legal in the territory since 1847, and Beijing apparently sees it as a way to bolster the local economy. With more Chinese traveling, Macao is enjoying a flood of mainland gamblers, setting it on course this year to surpass Las Vegas as the world’s largest gambling market.

Although Macao is said to report suspicious gamblers to Beijing, its casinos have been a destination of choice for legions of corrupt officials.

The party has been stung by a recent string of highly embarrassing gambling sprees by those in power. Party officials in Sichuan province were found gambling during work hours in teahouses, and presidents of state-owned companies squandered $1.5 million in taxpayer money at the tables in Macao and Myanmar. The final straw may have been the case of Cai Haowen, 41, a mid-level transport official from the northeastern province of Jilin. He disappeared late last year after allegedly absconding with $330,000 in public money and losing it all during 27 trips to a North Korean casino. Police found and arrested him in early February.

“Common people have a very strong reaction to this, wondering how they can be gambling when we don’t have enough to eat,” said Zhou, the sociologist. “It would be less damaging if it were in China, but to be losing our money to North Korean leader Kim Jong Il is ridiculous.”

China’s gambling ban has created opportunity in neighboring countries, with more than 200 casinos cropping up in recent years just over the border in North Korea, Myanmar, Vietnam, Laos and Russia. Often, these establishments admit only Chinese. Many reportedly are owned by Chinese and even receive power and water from China.

China’s official media report that Beijing recently has managed to have nearly half these casinos closed at least temporarily by exerting political pressure, restricting the ability of customers to cross the border and even, in some cases, cutting off utilities.

As with many things in China, however, casinos with good connections have managed to stay open, even benefiting as their competitors are shuttered. Just 300 feet over Ruili’s border with Myanmar, the massive Yong He Hotel and casino complex is doing a brisk trade.

“Would you like to go to Myanmar?” a smiling Chinese soldier asked as she guarded the border near the “Union of Myanmar, Silver Elephant Immigration Gate.”

Visas, even temporary passports, are available, no questions asked, for $30 to $40 from people who have good guanxi with local officials. For those who can’t be bothered with formalities, taxi drivers helpfully point out well-worn breaks in the yellow-and-green fence separating the countries.

China has watched legal casinos as far away as Las Vegas and Atlantic City siphon off its national wealth. With so much money on the table, even conservative countries such as Singapore are considering casinos, joining Australia, the Philippines and South Korea in aggressively courting Chinese gamblers. Particularly attractive are the “whales,” high-stakes players who may drop $100,000 on a single bet.

Researchers at the Chinese Center for Lottery Studies at Peking University estimate that Chinese lost $72 billion gambling overseas last year, up from $48 billion in 1997. By some accounts, eight out of 10 Chinese tourists to neighboring countries gamble.

With all that money leaving the country, and questions about the long-term effectiveness of gambling bans, academics have called for study into eventually legalizing the industry under careful supervision.

“There’s a huge amount of money flowing out of the country, a lot of it taxpayer money,” said Chen Xingliang, vice dean of the law school at Peking University. “Many say if you legalize it, at least the country wouldn’t lose all that money.”

Another lingering question is what will happen after the current crackdown ends.

“What happens after May? Do you really believe you can stop people’s desire to gamble?” said Wang Xuehong, director of Peking University’s gambling research center. “Chinese love gambling. Even simple people realize cracking down alone is not going to solve the problem.”

In mounting this campaign, China’s leaders joined a string of emperors stretching back millenniums seeking to curtail a beloved activity.

“Chinese are the biggest gamblers in the world,” said Hu, the economics professor. “Thousands of years under an imperial system that tries to keep people down leads to a mentality of trying to become super-rich overnight, preferably without the hard work.”

In fact, dice found recently that date to 3,000 BC suggest that games of chance have a long history in China. In the 3rd century AD, scholar Wei Qiao bemoaned gambling’s spread, noting that people were losing houses, wives, even their clothes.

“By the time they’re finished, they’re half or completely naked,” Wei wrote. “It’s shameless.”

Almost as ancient as gambling are the efforts to wipe it out. During the Tang Dynasty (618-907), gamblers faced 100 lashes, death or forced tenure in the army, while Song Dynasty Emperor Zhao Kuangyin, who ruled from 960 to 976, decreed that the worst offenders’ hands would be cut off. “The measure was very effective for quite some time,” historians noted.

Tao Zhenggang, recently retired from the Shanxi Archeology Research Institute, said government officials had often been the most brazen, even wagering their jobs. At a dig three years ago, he found dice in an ancient garbage dump beside a border guard post from the Song Dynasty. “This proves,” he said, “that even soldiers guarding the country were gambling.”

Yin Lijin and Bu Yang in The Times’ Beijing Bureau contributed to this report.