Posted: Wed Feb 14, 2007 12:48 pm Post subject: China, Hong Kong and Macau
WELCOME! China, including Macau (Chinese Territory)
Conde Nast Traveler
Will This City Save Us All? Las Vegas is the unlikely incubator of the latest anti-terror technologies - breakthroughs born of twin concerns: how to protect the free-spending multitudes while avoiding a police state. The result is a wide-open fortress where hospitality is king and data is the best defense. Guy Martin reports on how security wagers being placed in Sin City may yield a jackpot in the war on terror
The Chinese Terrritory of Macau, 40 miles as the crow flies from Hong Kong, is a strange place. Under the Portuguese, the triads (or local mafia families) ruled absolutely. But the Chinese government began muscling them into submission after receiving the territory back from Portugal in 1999. One way to hit the triads hard, Chinese authorities deduced, was to open Macau's gambling industry to foreign investment. Steve Wynn is the second foreign operator allowed intot the territory since the Chinese government broke the monopoly of longtime gambling king Stanley Ho. (The first was Wynn rival Sheldon Adelsen, of The Sands).
... (Larry Mefford): "There's more casino crime and perhaps more counterfeiting than in Vegas, so we've hired a lot of former local law enforcement officials to handle that for us." Which is to say that Macau-born-and-bred officers have spent years combatting local lawbreakers, and hence are already up to speed.
More to the point, perhaps, is Macau's proximity to several fronts in the war on terror. The thousands of islands stretching from the Indian Ocean to the South China and Celebes seas - including those belonging to Indonesia, Malaysia, and the southern Philippine state of Mindanao - are home to the world's largest Muslim population. Jihadists on the lam from Malaysia and Indonesia have used the Mindanao jungle as a refuge. One of the most notorious Indonesian bombers, Riduan Isamuddin, a.k.a. Hambali, was captured by the CIA and Thai army troops in the jungle along the Laotian-Thai border. Hambali is blemed for the 2005 Bali bombings, and has taught bomb-making to jihadists of many nationalities in the rebel camps of Mindanao, where the 400-year-old Christian-Muslim conflict offers cover to rebels from across the region. American and European tourists have been taken hostage and killed by Muslim guerilla groups in the southern Philippines. Although no radical group has yet had the audacity to attack territory belonging to the Chinese, Mefford's job is to look beyond present circumstances. (-- p. 154)
China, the European Communities (EC) and Japan to participate as Third Parties to the WTO gambling dispute as Compliance Panel set to review U.S. failure to implement ruling.
Editor's Note: We found the following item in ATE's report Oct. 30/06: "Asia is new online prize. Asia is going to be the 'prize' of the online gambling industry when it overcomes its current legal issues according to Simon Holliday of Global Betting and Gaming Consultants. Speaking at the Remote Gambling Associations AGM, Holliday said that the Chinese online gaming market, 94 per cent of which is unregulated, would take time to crack." According to his bio listed at a Dec. 8-9/05 gaming conference, "Simon Holliday is a partner at Global Betting and Gaming Consultants (GBGC), the leading UK-based consultancy, which he co-founded in 1998 with Warwick Bartlett. At GBGC, he is responsible for analysing data for the online and land-based markets, producing the forecasts and writing material for clients and the company's publications. Since its inception GBGC has worked with or supplied information to nearly 250 organisations operating in, supplying to or analysing the betting, gaming and lottery industry. Simon was a consultant to Dresdner Kleinwort Wasserstein on the Party Gaming IPO, the leading online poker operator, contributing to two pieces of analysts' research and UK and European investor road shows. He is a member of the Gerson Lehrman Group Council of Advisors where he is ranked in the leading 20% of members."
But see also 'Look East', but gaming industry sees sunset in The Antigua Sun Oct. 19/06 by Ronald Maginley, who cautions: "In calling for companies to shift focus to Asian countries the government demonstrates its complete lack of understanding of the gaming industry, of e-commerce issues, or of issues as simple as culture. Yes, it is true that an Asian market exists. This market, however, is one that is firmly grounded in table games located within physical casinos and within traditional games such as Mahjong and Paigow (a game similar to dominos). These games, social in nature and often played among families and in informal settings, do not lend themselves easily to an online format. The second issue affecting the development of Asian gaming involves a simple social issue. Unlike most western countries, Asian homes, due largely to population density and the high cost of real estate, are small. A typical home in Asia housing four people is smaller than most of our front rooms. I have two friends who share an apartment measuring just 180 sq. feet. Worth over US$250,000, it still is very cramped by our standards. Because of this fact, many Asians use their homes as places to sleep. All entertainment and social functions happen in public spaces. In light of this no one is at home to log on to a computer to place a bet. Until gaming companies move to the delivery of gaming services to mobile devices such as phones, net gambling for Asians will remain a marginal activity."
There's something due any day;
I will know right away,
Soon as it shows.
It may come cannonballing down through the sky,
Gleam in its eye,
Bright as a rose!
Editor's Note: We're starting to feel like Tony in ]West Side Story - something's coming, don't know what it is but it is gonna' be great. What's up with inscrutable China, recently a vocal pro-Antigua third party in the World Trade Organization (WTO) gambling dispute compliance review, which found U.S. online gaming prohibitions in breach of trade obligations?
Feb. 26/07 Macau warned about too many casinos
Deutsche Bank has warned that Macau is facing a potential oversupply of casinos due to the 'relative ease' of revenue-sharing arrangements between non-licence holders and concessionaires. Karen Tang, analyst for Deutsche Bank, said that the franchise arrangements being negotiated by some of the six official licence holders in Macau highlighted the 'supply-side risks' in the region.
China has launched a three-month crackdown on Internet gambling aimed at 'purifying the cyber environment', according to a number of governmental departments. A joint statement from the Ministry of Public Security, the Ministry of Culture, the Ministry of Information Industry and the State Press and Publication Administration accused online gambling of ruining the online environment, prompting the strict supervisions now being put on the Internet. Beijing, Shanghai, Guangdong and Zhejiang were highlighted as key areas to be supervised, the statement said, and warned that local government departments should strictly supervise online game service providers, who are not allowed to exchange 'virtual money' with real currencies or properties. Gambling was originally outlawed on the Chinese mainland nearly 60 years ago when New China was founded.
Macau has officially overtaken the Las Vegas strip as World's casino capital after posting record gambling revenues, which exceeded $7 billion from its 22 casinos for 2006. In comparison, Las Vegas' main strip generated $6.6 billion in revenue from its 40 casinos, which include the Venetian and MGM resorts.
The Chinese enclave opened its gambling borders to international operators in 2001 when the government ended Stanley Ho's monopoly, causing the current boom.
All doubts as to whether regulators in Macau want to embrace interactive gambling have been put to rest. The way to a regulated prosperous I-gaming industry in the special administrative territory is not entirely evident, but Jorge Costa Oliveira's presentation at the Fifth Annual Pacific Congress on I-Gaming (PCIG) is a clear indication that the will is there ... and it is strong.
Oliveira, who oversees legal matters for the Macau Gaming Inspection and Coordination Bureau, told an audience of 200 PCIG attendees that he is 100 per cent behind the passage of I-gaming regulations and that it could happen within the next year or two. He also shared very clear objectives for moving forward with a regulatory model. For starters, Oliveira sees no reason to reserve concessions for an exclusive licensee (as is the case now with MacauSlot being the sole licensed Internet betting operator). To the contrary, he stressed that they do not wish to impose a limit on the number of licenses issued. They do not, however, intend to ease regulations for the sake of expanding the field of qualified operators. ... a potential regime that bears many similarities to the U.K. approach, and Oliveira acknowledged this by crediting England for providing a viable model. Of importance in the international picture is the system's establishment of an open market that knows no borders. This means Macau, under the plan outlined by Oliveira, would place no restrictions on where its online gambling licensees can offer their services. (emphasis added)
On Asia's language, legal and marketing barriers to remote gambling:
The Globe and Mail Report on Business Casino risqué Online gambling, extreme fighting, heat from U.S. authorities - the fabulous (and somewhat murky) world of Calvin Ayre, farm boy-turned-tycoon.
By Timothy Taylor
... The hurdles the industry is now facing can be blamed squarely on the U.S. Department of Justice. Its shooting war with the online gambling sector began in July, 2006, when government officials arrested David Carruthers, CEO of BetonSports.com, and charged him with racketeering and fraud. The crackdown continued that October, after Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA), banning banks and credit card companies from processing payments to online casinos. (Proponents of the act tend to cite gambling addiction rates and the risk of criminal or terrorist money laundering[ through unregulated online gambling sites.) By January, 2007, the sector was in full retreat, with virtually all publicly traded gambling companies withdrawn from the U.S. market. Still, the FBI swooped in and arrested Canadians John Lefebvre and Stephen Lawrence, founders of Neteller Inc., a payment processor that had continued to handle billions on behalf of the industry.
... The more fatal problem, however, has been software-related. Online casinos very commonly use gaming and support software licensed from third parties. In the wake of the UIGEA, many of these third-party suppliers adjusted their systems to block U.S.-based Internet addresses, vaporizing the American customer base for many online casinos. That's what happened to the online poker site Doyles Room when its network, provided by Tribeca Tables, decided it could no longer risk operating in the U.S.
... Almost every CEO in the business is now talking about expansion into Asia, but the lost revenues won't be replaced quickly. The U.S. market represented more than 50% of the global industry in 2005 (prior to the legal crisis), according to Christiansen Capital Advisors founder Eugene Christiansen, who has tracked gambling industry volumes since 1982. Both Costigan and Hawkins also stress how difficult Asian expansion can be. The preferred games are different. There are language barriers and marketing problems, and the legal environment in Asia is not necessarily more lenient. China has been stepping up enforcement of its regulations against online gambling, Costigan points out, citing a recent three-month crackdown[/color]. (emphasis added)
Indeed Western gamblers looking for something more exotic than Reno or the Riviera are in for a bit of a shock when they arrive in this smog-shrouded enclave. In Macau's city center, the pastel facades of Senado Square and the ruins of St. Paul's cathedral evoke Macau's four centuries under Portuguese rule. But the frenzy of development elsewhere lends this Old World city the feeling of a frontier boomtown (albeit a relatively sober one: Macau's hard-core gamblers prefer tea to liquor). While Macau is now the world's gaming capital - last year revenue surged 22% to $7 billion, vaulting the city ahead of Vegas - there are just a few decent restaurants and not much in the way of shopping or shows to speak of (yet). ](emphasis added) Still, Macau is a fascinating place to watch some of the most intense gambling around, both at the baccarat tables and amid vast, dusty construction sites, where high-rolling developers are betting billions.
... There is, however, one party that wants to hedge its bets: recently authorities in neighboring Guangdong province sharply curtailed the number of new visas granted to tourists from the mainland, possibly under pressure from Chinese authorities to curb speculative excess. The move prompted Steve Wynn, who opened the swank Wynn Macau last year, to announce he was scaling back expansion plans.
Should the government crack down, soon foreigners will have another Asian Vegas to visit: Singapore's government has scrapped its long-standing ban on gambling and has struck deals for two multibillion-dollar hotel/casino developments .. (-- pgs. 105-108)
ATE Online Cryptologic completes $1.2m deal for Asian distributor
Cryptologic has completed a $1.2 million agreement to purchase a financial interest in 568 Network, a developer and distributor of online casual games to the Chinese market. Under terms of the agreement, Cryptologic holds the option of taking a controlling stake in 568.
The Hong Kong Jockey Club announced today (1 August) that its total turnover from all operations for the 2006/07 racing season passed HK$100 billion for the first time, with its core business of horse racing showing especially encouraging results. While warning that the Club still faced tough challenges in winning back business from illegal and offshore operators, as well as growing competition from other forms of entertainment, Chief Executive Officer Winfried Engelbrecht-Bresges, said that the Club's efforts to establish Hong Kong as a world hub of racing and equestrian sports were clearly paying off. (emphasis added)
Hong Kong's staging of the Beijing 2008 Olympic equestrian events would further put the city on the world map, he added, as well as leaving a sporting legacy that would benefit the whole community. "As Hong Kong's premier provider of sporting entertainment, we are strongly committed to the development of all types of sport in the community and are currently exploring a number of other long-term sports development projects. For instance, we have already committed funds to setting up a new Football Academy and are exploring ideas for developing football more widely in the community. We are building a new public golf course and establishing a Golf Academy at Kau Sai Chau. In addition, we have also recently committed funds to building a new District Sports Complex in Yuen Long."
View the excellent photos at the site's History link:
Horse racing in Hong Kong commenced in 1841 with the arrival of the British, who immediately set about draining a malarial swamp to form a racetrack at Happy Valley. With the exception of a few years during World War II, the track has been non-stop action ever since. The Hong Kong Jockey Club was founded in 1884 and changed from an amateur to a professional organisation in 1971. A second racecourse was opened at Sha Tin in 1978.
The growth of the sport's popularity was attended by an increase in illegal bookmaking. In 1973, the Government authorised the Club to operate off-course betting branches to tackle illegal gambling head-on. Since then, the Mark Six lottery and regulated football betting have also been introduced to combat illegal gambling.
The Club has a long tradition of donating to charitable causes, but it was in the 1950s, as Hong Kong struggled to cope with post-war reconstruction and a massive influx of immigrants, that this role became integral to its operation. In 1955 the Club formally decided to devote its surplus each year to charity and community projects.
China is going through a phase of seeking to learn from the outside world in order to better develop, administer and regulate the lottery and indeed wider gambling market. As it does so, it will aim to strengthen the domestic industry before possibly gradually liberalizing the sector. (emphasis added) (-- p. 15)
It's always tease tease tease
You're happy when I'm on my knees
One day is fine and next it's black
So if you want me off your back
Well come on and let me know
Should I stay or should I go?
Should I stay or should I go now?
Should I stay or should I go now?
If I go, there will be trouble
And if I stay it will be double
So come on and let me know
There is increasing talk among some officials and academics about the need for the Chinese state to bring all forms of lottery and gambling under one single, perhaps dedicated organization, operating lottery activities nationally rather than provincially. Academics in China often work on important policy think tanks and are frequently well connected to senior government officials. Moving from a regional to a centralized operation seems unlikely given that the overall trend is for provinces to become increasingly independent, as well as the sheer size of the country and differences in tastes and lottery consumption habits in different parts of China. Although the central government sees the obvious benefits of having competition between lotteries, this tending to drive more innovation and economic efficiencies over time, it can lead to some complications on a regulatory and policing perspective, as the commercial and administrative functions are not currently fully divorced. We can foresee the increasing emergence of one single government authority administering, regulating and developing the sector, whilst various much more commercial operations with much less of a link to the state are granted the right to compete in expanding the sector. (-- p. 25)
4.5. Online gambling
Most foreign online gambling operators target Chinese consumers, with localized sites, games designed for the Mainland audience, and telephone call centres located in such areas as Macau. As a result, many such companies and their value chain partners are already benefiting from the booming Chinese gambling market. The Chinese government is clearly aware of many of these operators, and does what it can to block access to such sites, with limited results. Ultimately, there is recognition that China will never manage to stop such activity, which is one of the reasons why one is seeing ever more implicit approval of lottery operators developing domestic online ‘gambling’ offerings. If overseas gambling operators wish to seek to over time enter this domestic sanctioned market, they must tread very carefully with their overseas or offshore activities as who may enter the market will be decided on a company by company basis. Assisting lottery operators develop online offerings and/or working with portals and other service providers to develop local games which for now are ‘play for free’, or are skill games with limited value prizes can allow foreign companies to develop local relationships, and develop their brands on the ground in-country. For companies choosing to remain offshore, rapid developments in communications, with VOIP, mobile technology, and various digital payment solutions beginning to gain broad adoption in China, as well as rapid development of call centre and other services in regions such as Macau, opportunities also exist to scale this business.
4.6. Skill-based games
It is estimated that over 20 million Mainland Chinese regularly play online games, mainly in internet cafes which are widespread across China. In 2004, Chinese players spent almost US$ 500 million on online games. Prizes if any are either virtual (eg: winning a virtual sword for a virtual role playing character, winning a higher performance virtual car, etc..) or are limited to relatively small values by law. A number of skill-based gambling games are being developed which for now do not involve real money, and are often based on very innovative business models. This can be a good way to establish a presence in China, develop a brand name and distribution channels, and generate some short term revenue streams. There are also opportunities to collaborate with internet portals. These have been competing for the most popular skill games which generate significant incomes for them. As a result they have been seeking strategic partnerships with games developers, licensing games, and even in some cases investing in or acquiring games developers outright. (-- p. 29)
What gambling services does China currently permit?
As a final note of caution however, new regulations and government crack-downs are expected, which may leave those who have sought to take advantage of unclear interpretations of existing laws exposed.(From Executive Summary, p. 3)
Gambling in Macau has been legal since the 1850s when the Portuguese government legalized the activity. Since then Macau has become known worldwide as the 'Monte Carlo of the Orient,' and gambling has become a significant part of the country's economy. Until Western-style casino games were introduced in the 20th century, only Chinese games were played, the most popular being fantan. ... The majority of gamblers are tourists from Hong Kong and Mainland China who come to gamble. Casino games, horse racing and greyhound racing are all also popular in Macau as well as sports betting and a number of lotteries. At the present time, however, Macau does not license online gaming operations. ... Currently, all commercial forms of gambling are illegal in Hong Kong, other than totalizator and pari mutuel bets accepted by the Hong Kong Jockey Club (HKJC) on horse races organized by the HKJC and the Mark Six lottery, also organized by the HKJC. ... Lottery is the only legal form of gambling in China...
There are said to be four physical forms of lottery ...:
• Physical form #1: Closed-ended Printed Lottery: this is the traditional type that involves issuing a fixed number of tickets with a pre-printed number on each ticket. The prize is pre-set and the winners are made public later via notice boards and TV shows. This form of lottery utilises uniform printing, code numbers and a fixed number of sales outlets.
• Physical form #2: Instant Lottery: buyers learn the result on the spot. This is the fastest growing form of lottery in China due to its ‘instant win’ nature. These lotteries are normally supported by large-scale sales and advertising promotions.
• Physical form #3: Computer-generated: sale of computer-linked lottery tickets, often via video lottery terminals. This is the most recent form of lottery in China. With this form of lottery, tickets are sold and winning the lottery is decided by whether the buyers’ numbers coincide with those drawn by lot.
• Physical form #4: paperless lotteries. Paperless games currently make up less than 1 percent of the China market but that proportion is growing fast, according to Hong Kong-listed Kantone Holdings1, which forecast it to hit 40 percent by 2010.
Lotteries primarily are authorised across two spheres each with their own government administration responsible for managing their own lottery, and benefiting from its rewards. A number of other ‘experimental’ or one-off lotteries have and do exist. ... As yet, there are few laws in place in China regulating the sector. The Central Committee of the Communist Party of China and the State Council have been the departments in charge of the lottery, issuing notices and administrative rules and regulations. But the implementation of those regulations has been, at times, weak. ... The Chinese Constitution prohibits any form of gambling. Moreover, Article 168 of the Criminal Code prohibits gambling in China. This law states that a citizen who assembles gamblers for profit-seeking purposes or is a professional gambler can be detained or restricted, sentenced to up to three years in prison, and made to pay a fine. Public gambling is not specifically mentioned in the Criminal Code, although the prohibition is taken to include all public places. This means that the law has the ability to cover those gambling over the Internet via Internet cafes or workplaces. However, some believe technically it is legal to gamble on the Internet from a private residence. A recent addition to the laws on lotteries from The Ministry of Finance announced that lottery prizes must be distributed in the form of cash rather than goods. With the new computerised lottery networks prize money can be transmitted directly to a winner’s bank account. Prior to this the most popular on-cash prizes were cars and television sets.
A “Lottery Law” has been in discussion at the State Council for several years, but so far has not been approved or announced. (-- pgs. 8-11)
What about China's trade obligations under various WTO agreements?
China’s * GATS commitments represent the most radical services reform program negotiated in the WTO. (emphasis added) China has promised to eliminate over the next few years most restrictions on foreign entry and ownership, as well as most forms of discrimination against foreign firms. These changes are in themselves desirable. However, realizing the gains from, and perhaps even the sustainability of, liberalization will require the implementation of complementary regulatory reform and the appropriate sequencing of reforms. Three issues, in particular, merit attention:
· Initial restrictions on the geographical scope of services liberalization could encourage the further agglomeration of economic activity in certain regions – to an extent that is unlikely to be reversed completely by subsequent country-wide liberalization.
· Restrictions on foreign ownership (temporary in most sectors but more durable in telecommunications and life insurance) may dampen the incentives of foreign investors to improve firm performance.
· Improved prudential regulation and measures to deal with the large burden of non-performing loan on state banks are necessary to deliver the benefits of liberalization in financial services; and in basic telecommunications and other network-based services, meaningful liberalization will be difficult to achieve without strengthened pro-competitive regulation.
* Editor's Note: China appears to have excluded Recreational Services, Leisure and Sport from its schedule of commitments...so far.
At the beginning of 2005, a sky-high figure of 600 billion yuan (US.5 billion) shocked all Chinese people. According to statistics from the China Center of Lottery Studies (CCLS) at Peking University, this astounding amount of money flew overseas due to gambling losses. It is 15 times the welfare and sport lotteries issued in 2003. It is also equivalent to China's total revenue from tourism in 2004. Some people even consider this estimated figure to be conservative. The capital loss cannot be accurately calculated.
Online gambling, only 5 years old at that time, started to infiltrate China in 2000. Online gambling first landed in provincial capitals and big and medium cities with high economic development and advanced network infrastructure. From 2000 to 2003, changes took place in the formation of online gambling participants, with continual increase in the number of domestic and foreign gambling websites, increase in the number of dealers, agents and members, all targeting China, with promotion of gambling sites resembling pyramid schemes common in multi-level marketing. Many gamblers who did not know how to use the internet could place their bets with their agents by phone calls, SMS and Fax. Those who know nothing about football and do not like ball games could hire others to control the odds for online gambling. Compared to traditional gambling, online gambling is more difficult for law enforcement to eradicate.
Agents of online gambling companies generally exercise long-distance control over their subordinate agents and members, while members usually do not meet each other directly. So online gambling is rather difficult to detect. Gambling companies are able to constantly change their website addresses and domain names when releasing gambling ads and information. So an online gambling site has certain built-in evasive abilities. Moreover, as soon as an operator is arrested, the evidence needed to convict him, which is stored in servers, will be erased. Therefore the police must take fast action and prevent the loss of crucial evidence.
The National Coordinating Office to Strike at Illegal Gambling revealed that the Ministry of Public Security would unite telecom departments, the China Banking Regulatory Commission and other departments to strengthen the supervision and control of online gambling sites and prohibit funds and assets from being sent to gambling websites through credit cards or bank account transfer. Meanwhile, to solve the problem of gathering sufficient admissible evidence of illegal online gambling, a judicial expertise center specializing in appraising electronic data will be founded and the appraisal results from this center will be regarded as admissible evidence and legally valid.
Article 303 of the Criminal Law of the People's Republic of China prescribes that those who are involved in gambling, setting up casinos and making a career of gambling for profit shall be sentenced to not more than 3 years' imprisonment plus a fine. Therefore, suspects like Fu Xiangrong who embezzled hundreds of millions of yuan of public funds will be sentenced to no more than three years in jail. The office has reported the current problem of light punishment of illegal gamblers to the relevant departments. It hopes that new legislation can resolve the bottleneck of insufficient punishment against gambling by making necessary and prompt revisions to the criminal law.
A nationwide campaign has broken up 249 internet-based gambling rings and arrested more than 760 suspects since being launched in January. Police in the capital have broken up eight online rings, including one with stakes reaching a total of 235 million yuan (US$28 million) and involving suspects Jia Dong and Yang Yi.
Police in north China's Hebei Province have arrested Liu Wenqing, Xu Yang and Huang Jian, agents for overseas-based gambling websites in China, who arranged Internet gambling with monthly transactions of more than 10 million yuan (US$1.2 million). Police in the Inner Mongolia Autonomous Region and northeast China's Jilin Province have both arrested agents for overseas websites and confiscated computers for gambling. Police in Guangzhou have confiscated 1.01 million yuan (US$120,000) from gamblers. The crackdown has targeted senior officials and executives at state-owned companies as part of a larger fight against widespread corruption.
Any State Functionary who takes advantage of his or her position to secure any benefits for an entrusting person, and accepts the bribery in the form of gambling shall be an act of acceptance of bribes under the new Circular. The Circular also identifies that the key factors to differentiate gambling concealing bribery, real gambling and other kinds of entertainment activities include: the background, place, time and amount of gambling; the source of the fund used for gambling; whether other participants have conspired in advance; the circumstances and the amount of the money or property changing.
Panelists at a trade forum held at a leading European think tank today leveled harsh criticism at the U.S. government for abandoning its commitments to the World Trade Organization over the gaming industry, claiming the decision threatens the credibility of the WTO itself and could lead to a chain reaction of similar withdrawals by other nations.
The Centre for the New Europe, a leading Brussels-based think tank with a special interest in open trade, focused the forum on a burgeoning trade clash between the U.S. and Europe over Internet gaming. According to analysts, the U.S. could be liable for up to $100 billion in trade concessions to European industries because of illegal discriminatory trade restrictions placed by the U.S. against European gaming operators. The amount of the dispute is the largest in the history of the WTO, and the U.S. withdrawal of its commitments represents the first time that has happened in WTO history. The withdrawal alarmed the speakers, all of whom specialize in trade issues.
"The U.S. decision is a major threat to a rules-based international trading system," said Nao Matsukata, the former Director of Policy Planning for the office of the U.S. Trade Representative. "If more countries follow the U.S. lead and do the same thing, the entire WTO system could implode and that would be extremely dangerous for U.S. economic interests and for free trade generally," he added.
"Part of what makes the U.S. such a formidable opponent in international negotiations is its credibility," Matsukata said. "That credibility is now at stake for the U.S. government not just in the trade area but in foreign relations generally." Matsukata, one of the most respected trade specialists in the U.S., also called the U.S. policy decision a "mistake not backed by any logical explanation of which I am aware". (emphasis added)
... "The WTO[/b][/i] has worked largely to the advantage of the U.S.," said Sallie James, a trade specialist at the Cato Institute who also spoke on the panel. "Any action the U.S. takes to undermine the integrity of the system is extremely dangerous to U.S. economic interests and to free trade generally."
Lode Van Den Hende, a trade lawyer at Herbert Smith in Brussels, criticized the U.S. for prosecuting foreign online gaming companies while letting domestic online gaming interests operate with impunity. "This is absolute discrimination against foreign operators that the WTO has found to be illegal," he said. "It is exactly the kind of practice that the WTO was set up to eliminate, and now the U.S. is violating this very basic principle that it fought hard to put in place at the inception of the organization."
... The panelists agreed that in the near future the U.S. likely would have a regulated, licensed, and non-discriminatory system in place for Internet gaming that would bring the U.S. back into compliance with W.T.O. rules. (emphasis added) Gaming industry representatives believe a legislative bill in the U.S. Congress sponsored by Rep. Barney Frank - which essentially creates a regulatory system for online gaming - could alleviate their concerns about market access and discriminatory prosecutions. ... The European Union has developed the world's leading Internet gaming businesses and is considered to have a strong lead over the U.S. in this sector, with operations in the U.K., Gibraltar, Malta, Austria, Bulgaria, Ireland, Estonia, and Sweden, employing an estimated 15,000 workers. ... The $100 billion U.S. gaming market is the largest in the world, employing more than 350,000 people and generates billions of dollars of tax revenues.
The online gaming dispute also has broader implications for Internet commerce. It is the first WTO case supporting a small country's right and ability to create a globally important business sector on the Internet, as Antigua claims it was doing with online gaming.
The WTO will most likely deal with other Internet cases soon, as U.S. search giant Google has suggested it will press a claim against China for violating the WTO by barring Chinese users from certain Internet sites using the Google search function. (emphasis added)
PCIG calling for speackers, topic suggestions for Macau conference Feb. 26-28/08:
For the past five years, Clarion Gaming (formerly River City Group) has produced an event for the Asia Pacific region called Pacific Congress on I-Gaming (PCIG). That event doubled in size in 2007 attracting over 200 attendees, and organizers expect it may double again in 2008, given the high level of interest in the potential of the Asian markets. This anticipated growth will come from a concerted focus on marketing the event to Asian operators, developers and marketing partners. To reflect this new focus, the event will now be known as the Asian I-Gaming Congress and Expo or AiG, modeled after its successful European counterpart, EiG.
In keeping with Clarion Gaming's pioneering work in this area, it is fitting that AiG will be among the first gambling-related conferences to be held at the fabulous new Venetian hotel and conference center in Macau. Scheduled for February 26-29, 2008, the conference will maintain its focus on i-gaming opportunities in Asia, while including coverage of the established industry in Australia and the emerging Indian market. ... Two specialized days added to the core conference in 2008 ... One is an investment seminar exploring both public and private investment options in the region. Another ... will look at the marketing challenges inherent in the region. For those looking for a review of the pertinent laws in various countries, as well as feedback on the types of marketing and advertising methods[/color] that work best for the myriad of cultures living in this region, this will be the chance to meet the experts and learn.
Call for Speakers
We are currently developing the program for AiG and, as always, we invite your suggestions and recommendations for topics and speakers.
If you are interested in presenting, or if you plan to attend and would like to see certain topics covered, please take a moment to submit a request by clicking here
A Chinese lottery ticket seller has been jailed for life for fraud for taking advantage of a system flaw to cash 28 million yuan ($3.76 million) in tickets illegally, state media said Tuesday.
Zhao Liqun discovered the flaw in the Welfare Lottery "3D" system in 2005 that let a person buy tickets with the right numbers within five minutes of their being announced, sources at the Intermediate People's Court in Anshan, northeastern Heilongjiang province, said.
Zhao, 36, who ran three lottery stalls in Anshan, "bought" the announced numbers many times over. "He asked his neighbors and friends to cash the tickets at the Welfare Lottery Center and to bring back the money," Xinhua quoted the court sources as saying. The lottery center found the prizes were illegally claimed and police arrested Zhao in January. The court jailed him for life for fraud and confiscated all his property.
The House Judiciary Committee heard testimony from various witnesses today, including Annie Duke, to discuss establishing consistent enforcement policies in the context of online wagers. The first panel of speakers included Rep. Shelley Berkley (D-Nev., who has introduced legislation to conduct a study of Internet gambling, and Rep. Bob Goodlatte (R-Va.), who helped push through the Unlawful Internet Gambling Enforcement Act. ...
She (Berkley) also discussed the World Trade Organization decision that the United States' online gambling laws violate international trade agreements. Berkley pointed out that choosing to withdraw from our trade agreements rather than comply with them is the wrong route to take.
"This is the trade equivalent of taking our ball and going home, and sets a dangerous precedent for other nations," she said in her prepared statement. "You can be sure that if China one day decides that it shouldn't have to comply with its WTO obligations, we will be the first to object". ... (emphasis added)
New lottery legislation and ferry service from Hong Kong to the casinos of Macau ... Is China preparing to legalize online gambling?
Clarion Gaming China drawing up lottery legislation
The Chinese government revealed that it is in the process of drawing up national regulations on the supervision of the lottery industry. An official with the Legislative Affairs Office (LAO) of the State Council said that they would be utilising the experience of other countries and regions to make explicit stipulations which would be released next year. ...
Adelson launches Macau ferry
Venetian boss Sheldon Adelson is launching a ferry service from Hong Kong to the island of Macau. Adelson said the move was aimed at upping the ante with competitors at the resort.
www.chinaview.cn China to issue 1st national regulation on lotteries
Edited by Wang Yan
SHANGHAI, (Xinhua) China is expected to issue its first national regulation on the supervision of the fast-growing lottery industry next year to stamp out fraud, which has been on the rise since the country launched its first lottery two decades ago. Legislators will draw on the experience of other countries and regions to work out the regulation and make explicit stipulations about each aspect of lotteries, such as the distribution, sales, announcement of results and fund management, an official with the Legislative Affairs Office (LAO) of the State Council said.
Other countries and regions always make laws first before developing the lottery industry, while China has acted to the contrary," Ding Feng, deputy head of LAO's Department of Political Science and Law, Labor, Social Security and Legislative Affairs, told a symposium held in Shanghai. "Lack of laws and regulations on lottery supervision has become a significant factor that has impeded the sound development of the industry," he said. (emphasis added)
Lotteries have generated huge economic and social returns in China in the past two decades. China had issued a total of 363 billion yuan (49 billion U.S. dollars) worth of lottery tickets by the end of last year, and more than a third of the money was spent on public welfare, such as the development of public sports facilities, education and health care for the handicapped. Buying lottery tickets has also given common Chinese people the chance to get rich. Last week, a player, yet to be identified, from the northwestern province of Gansu won the country's largest ever individual lottery prize of 102.7 million yuan. The winner bought 20 identical "Double Colour Ball" tickets issued by the China Welfare Lottery at a cost of 40 yuan.
But the industry has also encountered growing problems such as fraud and other malpractice. Last month, a 36-year-old lottery vendor in the northeastern Chinese city of Anshan was jailed for life for taking advantage of a flaw in the Welfare Lottery "3D" system to cash 28 million yuan in lottery tickets illegally. A couple of months ago, two bank employees in the northern city of Handan were sentenced to death after being convicted of the country's largest ever bank theft involving 50.95 million yuan, which was spent on lottery tickets. In 2004, several people were found guilty of manipulating a scratch-and-win sports lottery in northwestern city of Xi'an and were sentenced to varying terms in prison. During the fraud incident, a contractor of lottery tickets cheated his way to top prizes - a BMW and 120,000 yuan - by marking lottery tickets and employing four people to falsely claim the prizes. The real lottery top prize winner Liu Liang, a young migrant worker, finally received the prize that was due and accepted apologies from local sports authorities.
Calls for publishing regulations or even a law on lottery supervision have been voiced repeatedly in recent years. At present, China has only a provisional regulation on the management of lottery distribution and sales, which was issued by the Ministry of Finance in 2002. "But it's only a departmental regulation," Ding said. Actually, China has begun drawing up a national regulation more than a decade ago and it has been delayed year after year due to divergences among different government departments, such as the Ministry of Finance, Ministry of Civil Affairs and General Administration of Sport. "The regulation is expected to be issued next year, a result of the growing public attention and acceleration of the legislation process," Ding said. (emphasis added)
China has stepped up efforts to crack down on fraud in lotteries. Last month, four government ministries - Finance, Public Security, Civil Affairs, Information Industry - and the General Administration of Sport jointly launched a campaign to crack down on illegal lottery selling on the Internet to fight lottery-related fraud. "Internet-based illegal lottery selling is on the rise in recent years, posing a threat to the operation of the lottery market," said a bulletin issued by the ministries. The bulletin listed some of the illegal activities, such as selling private lotteries under the name of state-run lotteries, providing illegal channels for sports gambling and underground Mark Six and lottery-related fraud.
The China Welfare Lottery Administrative Center and the sports lottery administrative center of the China General Administration of Sport are the only two legitimate lottery sellers in China and they are both state-run.
We are now living through the third great power shift of the modern era. It could be called "the rise of the rest." Over the past few decades, countries all over the world have been experiencing rates of economic growth that were once unthinkable. While they have had booms and busts, the overall trend has been unambiguously upward. This growth has been most visible in Asia but is no longer confined to it. That is why to call this shift "the rise of Asia" does not describe it accurately. In 2006 and 2007, 124 countries grew at a rate of 4 percent or more. That includes more than 30 countries in Africa, two-thirds of the continent. Antoine van Agtmael, the fund manager who coined the term "emerging markets," has identified the 25 companies most likely to be the world's next great multinationals. His list includes four companies each from Briazil, Mexico, South Korea, and Taiwan; three from India; two from China; and one each from Argentina, Chile, Malaysia, and South Africa.
Look around. The tallest building in the world is now in Taipei, and it will soon be overtaken by one being built im Dubai. The world's richest man is Mexican, and its largest publicly traded corporation is Chinese. The world's biggest plane is built in Russia and Ukraine, its leading refinery is under construction in India, and its largest factories are all in China. By many measures, London is becoming the leading financial center, and the United Arab Emirates is home to the most richly endowed investment fund. Once quintessentially American icons have been appropriated by foreigners. The world's largest Ferris wheel is in Singapore. Its number one casino is not in Las Vegas but in Macao, which has also overtaken Vegas in annual gambling revenues. The biggest movie industry, in terms of both movies made and tickets sold, is Bollywood, not Hollywood. Even shopping, America's greatest sporting activity, has gone global. Of the top ten malls in the world, only one is in the United States; the world's biggest is in Beijing. Such lists are arbitrary, but it is striking that only ten years ago, America was at the top in many, if not most, of these categories.
... in fact, the share of people living on a dollar a day or less plummeted from 40 percent in 1981 to 18 percent in 2004, and is estimated to fall to 12 percent by 2015. China's growth alone has lifted more than 400 million people out of poverty. Poverty is falling countries housing 80 percent of the world's population. ... In .... China, India, Brazil, Russia, Indonesia, Turkey, Kenya, and South Africa - the poor are slowly being absorbed into productive and growing economies. For the first time ever, we are witnessing genuinely global growth. ... It is the birth of a new global order.
A related aspect of this new era is the diffusion of power from states to other actors. The "rest" that is rising includes many nonstate actors Groups and individuals have been empowered, and hierarchy, centralization, and control are being undermined. Functions that were once controlled by governments are now shared with international bodies like the World Trade Organization and the European Union. Non-governmental groups are mushrooming every day on every issue in every country. Corporations and capital are moving from place to place, finding the best location in which to do business, rewarding some governments while punishing others. Terrorists like Al Qaeda, drug cartels, insurgents, and militias of all kinds are finding space to operate within the nooks and crannies of the international system. Power is shifting away from nation-states, up, down, and sideways. In such an atmosphere, the traditional applications of national power, both economic and military, have become less effective.
The emerging international system is likely to be quite different from those that have preceded it. One hundred years ago, there was a multipolar order run by a collection of European governments, with constantly shifting alliances, rivalries, miscalculations, and wars. Then came the bipolar duopoly of the Cold War, more stable in many ways, but with the superpowers reacting and overreacting to each other's every move. Since 1991, we have lived under an American imperium, a unique unipolar world in which the the open global economy has expanded and accelerated dramatically. This expansion is now driving the next change in the nature of the international order. ((From the chapter entitled, The Rise of the Rest, pgs. 2-4)
China Shakes the World is a business book, but one with a strongly beating human heart, and it's a splendid introduction to what is happening in, and to, China today. What Kynge brings to the subject is a real passion fuelled by his years living there, which has also given him a depth and sophistication that few other China books can match.
The book is too short, and you feel Kynge has a lot more to say on the subject, but its brevity makes for an easy read. Kynge loves the people.
He had real sympathy for the Chinese, who want the same that Americans and Europeans want - a car, a house, education for their kids and access to consumer goods. But he acknowledges that the sheer numbers involved means this is impossible: "The chances that the Chinese will one day be able to consume at the same rate as Americans do today are close to zero..."the world does not have the resources to cater for 1.3 billion Chinese behaving like Americans," he writes. (From the excellent Book Reviews section beginning at p. 10)
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