Loan sharks infest murky casino waters


Luis Pereira and Zach Coleman


July 29, 2005


 

Macau loan sharks face justice. - SING TAO

Loan-sharking is on the rise despite the government's move last year to give casinos legal authority to extend credit.

Most cases go unreported, but even so, the Judiciary Police received 46 loan-sharking reports in the first three months of the year, compared with 86 all of 2004.

John Bruce, Macau general manager for corporate investigators Hill & Associates, said the rise reflects the boom in business at the city's casinos. ``There are more customers,'' he said.

Most of the new customers are casual gamblers who generate too little betting volume to merit a casino's investment in granting them credit. Granting credit is a risky move, particularly in Macau, given the shortage of background information available on bettors and the absence of any provision to offset uncollected debts against the effective 39 percent tax imposed on gross gambling revenue.

Loan sharks here typically accost downcast visitors leaving Macau casinos or returning to the Hong Kong ferry terminal or border. They often accompany borrowers back to the tables, taking a share of each winning bet placed. Unlucky borrowers are sometimes confined until their loan is paid off as ransom by family or friends. China Daily reported earlier this year on the case of four people charged with killing a clinic owner in the city of Zhongshan who failed to repay HK$1.7 million in Macau borrowings.

``Right now, the loan sharks are still doing quite well,'' said Stephen Vickers, chief executive of investigators International Risk. ``It would be naive to expect this activity to change in the short term.''

Police say that gambling usury is hard to prosecute. ``Out of shame or twisted moral belief, victims seldom turn to the police unless things get out of control, namely when violence has taken place or in the case of kidnapping,'' said a high-ranking officer.

Because of insufficient evidence and frequent no-shows by borrowers whose testimony is required in court, fewer than half of the cases are prosecuted and only about 10 percent of those charged are convicted. The Judiciary Police plans to beef up its gambling crime division to address loan-sharking and upgrade it into a department. More officers will be deployed into the city's casinos.

Some casinos are also taking on the sharks directly using their own security teams and surveillance equipment, but Sands Macau operations vice president Walter Power concedes that loan-sharking ``cannot feasibly be eliminated but can, and is, being controlled.''

Wang Wuyi, an associate economics professor at Macau Polytechnic Institute, believes one way to combat loan-sharking is to focus on demand, rather than supply. He suggests casinos be required to bar any customer who leaves the premises from reentering for at least three hours. ``If people have time to think things through, they will not so easily fall into temptation,'' Wang said.zach.coleman@singtaonewscorp.com

 


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