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JULY 24, 2000 VOL. 156 NO. 3

Bad Boys Abound in 'Vegas East'
Among the owners of casinos on Thailand's borders are warlords, drug dealers and shady politicians

Thai real estate baron Jiratha Anupavatham appears to have made a bad investment. Not a soul is stirring in the eerily silent, marble-and-teak lobby of his $25 million Paradise Resort, a 144-room pleasure dome that opened in January on the Burmese bank of the Mekong River, opposite the Thai town of Chaeng Saen. The hallways are deserted, the swimming pool empty and the shop spaces vacant. But Jiratha, small and pear-shaped in a black shirt emblazoned with Playboy logos, is unperturbed. "I'm the biggest and the best," he proclaims, as he surveys the muddy river from the Paradise's palatial dining room. His court of underlings and bodyguards mumble in assent. "That's right, this is Vegas of the East," an associate chimes in. Jiratha barks at the man to keep his mouth shut. Then he sternly reminds all present: "There is no casino here."

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Oh, no? Just a few meters away, behind stained-glass doors, metal detectors, security guards and video cameras, scores of ethnic-Chinese Thais are hunched over green felt tables playing blackjack, baccarat and roulette. Despite appearances, the Paradise Resort is actually fully booked. But Burma's generals, already scorned by many countries for allegedly profiting from the drug trade, don't want it advertised they are also earning cash from casinos. That's why Jiratha insists he merely runs a "games room."

Whatever you call it, it's elegantly appointed in golden teak and crystal chandeliers. The mostly male gamblers, however, wear tacky windbreakers, polyester pants and golf shirts. Rolexes, chunky gold rings and other ostentatious jewelry abound. A woman with ruby-studded black patent flip-flops, mauve pant-suit, diamond dangle earrings and a sculpture of sprayed black hair, tosses chips at a baccarat table where the minimum wager is $250. "I think it's great," she says. "Thailand should have something like this."

Don't bet on it: gambling is illegal in Thailand. So, to the consternation of the government, military and security agencies, casinos are cropping up all around the area in Burma, Laos and Cambodia. And Thais are flocking to them, along with gamblers from China and other Asian countries. The border regions in the Golden Triangle formed by the intersection of Burma, Laos and Thailand have long been lawless zones where rebel groups hold sway; the smuggling of drugs, weapons, timber and people flourishes; aids and malaria are rife. Gambling is just the next logical step. Casinos have become the hottest new business for former opium kingpins, mass murderers and shady politicians.

Thailand's economy is still recovering from its 1997 bust, but the border casinos are a sure sign that the black market never stopped booming. More than a dozen have opened in the past three years, and more are being built. "What's our reaction? Dismay," says Don Pramudwinai, spokesman for the Thai Ministry of Foreign Affairs. Casino owners say they are bringing development to places that sorely need it. Thai military and law enforcement officials say the gambling houses are money laundering operations and that criminals may be using the easy cross-border passage they provide to smuggle people and drugs. Gamblers who travel across the Mekong to the Paradise, for example, never pass an immigration or customs checkpoint. Prime Minister Chuan Leekpai has urged Thais to boycott the casinos, to no avail.

Thailand is itself infested with hundreds, perhaps thousands, of illegal gambling dens and numbers rackets. In a 1996 study, economists at Chulalongkorn University estimated that illegal gambling accounts for the lion's share of Thailand's black economy and generates between $5.5 billion and $11 billion a year, or 4% to 8% of the gross national product. That's more money than drug trafficking and prostitution combined. Profits from casinos and underground lotteries are used to purchase protection from police and the military, to finance political parties and to buy votes in elections. While Gen. Surayud Chulanont, Thailand's Commander in Chief, has been fighting to rid the army of corrupt soldiers, an intelligence officer based on the Thai-Burmese border says the casinos couldn't operate without the army's tacit permission. "The payoffs go up to the highest levels of the militaries on both sides," he contends. Law enforcement officials say prominent Thai politicians—some of whom are also suspected drug traffickers—are among the owners of several casinos. The politicians they name, however, deny the allegation.

Prasit Phothasuthon, a partner in the Paradise Resort, is the Thai Minister of Agriculture's brother and a respected businessman. With the blessings of the government of Laos and help from international investors, he plans to build more hotels and casinos, housing estates, a motor-racing stadium, tea plantations, an airport and a tax-free banking zone. "It will be Macau and the Cayman Islands rolled into one," Prasit says. "I don't want to launder money. I want to launder the Golden Triangle. We can clean this place up. It will be a crime-free area." But other casino operators are skeptical. "If you have a casino, you will have money laundering, prostitution and criminal elements. You can't avoid it," says a manager at a gambling house in the Burmese town of Tachilek.

The Moei River separating the Thai town of Mae Sot from the Burmese city of Myawaddy is a hotbed of crime. Myawaddy's squalor—the plywood-and-tin shacks and unpaved muddy roads crowded with mangy dogs and goats—belies the lucrative smuggling that may be the city's main industry. Men and women lugging sacks of amphetamines and other contraband ford the shallow, marshy river to Thailand in daylight as scowling lookouts keep watch. On the Burmese bank, a few meters from the wading smugglers is the Riverside Club, owned by Tong Jo, son of Khun Sa, the opium warlord who surrendered to the Burmese in 1996 but now lives comfortably in Rangoon. Thai intelligence officials call the Riverside Club "Khun Sa's casino" and say partners include a Burmese army official.

Khun Sa isn't the only drug dealer with a gambling den. The Wa, a Burmese tribe with a 20,000-man army, are considered Asia's new heroin and amphetamine kings. They operate a casino in Mong La, across from the Chinese province of Yunnan, and were building another near Thailand until the Thai army shut down a border pass.

The Thai army also forced Cambodian operators to abandon two casinos inO'Smach, opposite Surin province. But elsewhere in Cambodia, all bets are on. In Poipet, 2,000 Thai gamblers a day play baccarat, roulette and slots at the Holiday Palace, the Golden Crown Casino and the Poipet Resort Casino—fronted by huge metal pillars depicting the Angkor Wat. Thai tough guys place bets as their bodyguards hover behind holding their bosses' mobile phones. "This is like Las Vegas 100 years ago," boasts one casino manager, blithely unaware that Las Vegas didn't even have casinos 100 years ago.

The Cambodian owners are businessmen close to Prime Minister Hun Sen. In December 1998, he ordered dozens of casinos in Phnom Penh closed, saying they contributed to kidnappings and other criminal activity in the capital. But he encouraged gambling in "development zones" along the Thai border.

Not everyone in Poipet is happy about such development. In June, more than 1,500 townspeople protested that soldiers forced them off of land near the casinos to make way for development projects. Soldiers fired shots to disperse the demonstrators and arrested six people. A U.N. High Commissioner for Refugees official confirmed that the land the Poipet squatters are being moved to is mined. If people in Poipet feel brave enough to protest, that isn't the case in Pailin, where two casinos are run by former members of the Khmer Rouge—the group that killed nearly 2 million Cambodians during their Killing Fields reign in the 1970s.

The same day as the protest in Poipet, Thai police closed the pier where boats carry gamblers across the Mekong to the Paradise Resort. Prasit says the closure is temporary, and that his opponents will soon see the benefits of gambling. Having failed to shut down its own illegal gambling dens, the Thai government is unlikely to be able to make its neighbors close their casinos. Especially when powerful and connected players have a piece of the action.

—With reporting by Kay Johnson/Cambodia

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