China Cracks Down in 'asian Las Vegas'

Chinese authorities have arrested almost 1.2 million people suspected of illegal betting offences during a nine month crackdown, state media reported today.

The arrests were part of a nationwide anti-gambling campaign from January to September in which police seized £166m and investigated 163,000 cases.

The crackdown was aimed mainly at preventing public officials from gambling away public money in Macau, the small special administrative region in southern China that is becoming known as the "Las Vegas of Asia".

More than 8,740 members of the ruling Communist party were punished for gambling between January and October, the official Xinhua news agency reported.

An official at the Communist party's discipline inspection commission was quoted by Xinhua as saying: "Cross-border gambling, especially [on the part of] government officials, could directly undermine [...] national security and social stability and tarnish the party's image."

He said 30 gambling agencies linked to overseas casinos and 19 underground banks were closed this year in an effort to deter cross-border gambling.

Among the party workers prosecuted was Cai Haowen, a former transport manager in Yanbian, a city in north-east China's Jilin province, which borders North Korea. Haowen was sentenced to 17 years in prison in May for embezzling and gambling £220,000 of public funds.

Macau is a former Portuguese colony, which was handed back to China in 1999. On the face of it, the territory, long regarded as the poor cousin of nearby Hong Kong and now back under Beijing's authoritarian rule, seems an unlikely place for a growth in casinos.

But experts say the mix of authoritarianism and liberal capitalist economics has created the ideal environment for a gambling boom.

In recent years, as more and more American-style casinos and hotels have been built, Macau has been vying for the title of entertainment capital of Asia and trying to shed its disreputable image. It is known as a hive of organised crime and prostitution.

Macua already generates 90% of its income from gambling and is profiting from the opening of the gaming industry to foreign investors and a relaxation of travel restrictions on the Chinese mainland.

The main lure for investors is the market of a billion potential Chinese gamblers, who have a reputation for betting intensively.

In the past two years, 14 mainland Chinese provinces have loosened travel restrictions, opening the door to Macau for hundreds of millions of people. Similar liberalisation planned for a further 16 provinces will expand the territory's potential market by half a billion people.

But Macau's sleazy reputation remains and has not been helped by rumours of money laundering in the territory and reports of mainland officials squandering public money on baccarat, blackjack and roulette.

As part of its crackdown, Beijing has stiffened penalties for the misuse of public funds and urged Macau to tighten its identity checks.