The closest Hainan has come to legalizing casinos came this past February, when Zhang Baoquan, a Chinese property tycoon, told Reuters about a cashless casino bar in his Mangrove Tree resort in Sanya. There, gamblers could exchange winnings for items like luxury goods, jewelry, artwork, and accommodations. Zhang told the reporter that China was not yet ready to legalize casino gambling, "but my personal opinion is, in future, there is a big possibility that they will have."
Two days after the Reuters story was published, Chinese authorities said they had shut down the casino. "We are investigating it, and so far it looks like they have violated their operating regulations," Chen Guangfa, the deputy director of the Sanya Culture and Sports Bureau, told the wire service for a follow-up article. In a July 23 interview, Chen told Foreign Policy that Zhang's bar got shut down because "it offered entertainments that went beyond what our permits had allowed." Zhang declined an interview request. Chen added that the bar is now closed and "undergoing reorganization."
THE BENEFITS TO BEIJING of legalizing casinos are plain to see. Macau's economy, for example, has grown dramatically in the last decade, and its citizens have hit the jackpot: The territory now boasts an annual per capita GDP of $78,275 -- considerably higher than the average American's income and more than 12 times that of the average Chinese. But while Macau captures an average of roughly $1.4 billion a month in tax revenue, according to Williams of GamblingCompliance, the central government in Beijing gets none of that windfall. With China's economy expected to continue its recent slowdown -- annual GDP growth dropped from 9.2 percent in 2011 to roughly 7 percent in 2013 -- casinos could be a helpful source of revenue. "Of course I hope the government will open up the market for gambling," says Wang Xuehong, executive director of Peking University's China Center for Lottery Studies. She believes legalizing gambling would help create jobs, bring in tax revenue, and allow Chinese enterprises "to participate" in the industry. Li Hai, associate dean of the School of Management at Shanghai University of Sport, agrees. "People's demand is there. It's a choice between blocking it and channeling it," he says.
But officials worry about the downside. Throughout Chinese history, there has been a fear that the central government will not be able to maintain its grip on power and that the provinces might go their own way (a sentiment captured by the centuries-old expression "The mountains are high and the emperor is distant"). Legalizing casinos would help provincial officials not only increase local tax revenues but also strengthen their power bases -- something Beijing doesn't want.
What's more, high-ranking Communist Party officials are ardent students of their own history. Gambling was a major social disruption in the 19th and early 20th centuries -- causing bankruptcies, breaking up families, and spurring other vices like opium use -- and they fear that legalizing gambling would revive those problems. "The government's main concern is its potential to disturb social stability and harmony," says Li. "It is a very sensitive subject." The Communist Party is also aware that casinos often attract organized crime -- as they did in Macau, as well as Las Vegas, which for decades was controlled by the mob.
Teresa Du, a communications manager at MGM Grand Sanya, doubts there will be any "significant policy changes" for at least the next five years, which is "frustrating," she said. "Everyone knows MGM specializes in operating casinos, but the only thing we can do is send petitions to the government." (A spokesman for MGM Resorts International said Du's comments "don't accurately reflect the company's views.") For investors, then, the key may be "to put your chips where they're supposed to be," says Desmond Lam, a marketing professor and gambling expert at the University of Macau. That way, if gambling is legalized in China, "they are in a good place."
William Weidner appears to be taking the other side of that bet. "We think the likelihood of China allowing casinos, even in Hainan, is very low," says Jennifer Lee, vice president of Weidner Resorts Taiwan. But Matsu has its own complications. Although relations are much better than in the past, tensions between Taiwan and mainland China still flare up occasionally. In June, Taipei deployed a multiple-launch rocket system in Matsu to fend off a potential Chinese amphibious landing. The irony, one imagines, is not lost on Weidner, who's hoping for a different sort of Chinese invasion.
Other obstacles stand in the way of this flood of tourists. Unlike traveling to Hong Kong and Macau, it's actually not that easy for Chinese to travel to Taiwan. And in February, testy Chinese officials in nearby Fujian province suggested they might ban residents from visiting the Matsu casino. (Lee said such comments are standard and not cause for concern.) Yang, the magistrate for Matsu, admitted that officials are still trying to work out the visa situation.
The Matsu project has been met with skepticism by many in the industry. Lee says that other companies have looked at building casinos on Matsu but admitted, "As far as I know, their interest has not been very high." Steve Tight, president of international development for Caesars Entertainment, which has been eyeing the more-developed Quemoy as a potential casino site, says his company rejected the idea of trying to build on Matsu because it was not as "attractive" a spot for investment. "There's no way [Weidner] can spend $8 billion on a small island," says one gaming analyst, who asked to speak anonymously. "That's insane! He could spend that money, but there's no way he could make it back."
In January, Weidner announced that he plans to build clusters of 30-floor hotels that would offer 26,000 rooms -- as many as Macau's total capacity and 13 times the number in Weidner's original proposal for Matsu. Three months later, Weidner Resorts posted a new video on its YouTube Channel titled "Weidner's Destiny, A Gem Now Awakening -- Matsu, The Mediterranean of Asia." The video opens with old images of artillery fire, describes the economic benefits that a casino resort will bring, and ends with a statement from Weidner himself. "It's time to change," he says forcefully. "Matsu is my destiny."