China-Backed Pacific Island Casinos ‘Threat to US Military’

Posted on: June 19, 2018, 03:00h. 

Last updated on: June 19, 2018, 11:44h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Chinese investment in Pacific-Island casinos is making life difficult for the US military. That’s the conclusion of a US government report which suggests that Chinese-backed projects, particularly on the islands of Saipan and Tinian – two of the US’ remotest territories – could turn the islanders against the military and undermine US influence in general.

Pacific-Island casinos
The US naval base at Guam is close to the Northern Marianas islands, where increased Chinese casino investment is in danger of turning islanders against the military presence, according to the report. (Image: VOA File Photo)

The US-China Economic and Security Review Commission (USCC) report “China’s Engagement in the Pacific Islands: Implications for the United States” was published last week.

On Saipan, Imperial Pacific is building the controversial Grand Mariana Casino Hotel & Resort. Imperial Pacific hit the headlines following an FBI raid on the casino construction site in April 2017 after the death of one of its workers. Authorities found widespread visa violations among the workers, most of whom had been brought from China illegally.

Questions have also been asked over how a temporary casino, opened in a small shopping mall, ostensibly to train dealers while the Mariana was being built, was able to report unaudited VIP rolling chip turnover of $49.2 billion for 2017, far exceeding the VIP transaction volumes of most major casinos in Macau, the world’s biggest gambling hub.

Military Resistance

Meanwhile, on Tinian, where the US Navy and Air Force conducts training exercises from its joint military base on nearby Guam, Macau-based Alter City Group has secured a 25-year land lease for a $1.2 billion integrated casino resort that would border Department of Defense-leased land.

The report states that Alter City has “fueled a narrative” that the US military presence will negatively impact Chinese casino resorts in the area and limit the island’s economic potential.

“The [U.S. military] has suggested activities which adversely impact the island of Tinian, its residents and adjacent operators like [Alter City Group],” the company said in response to planned military exercises on Tinian. “The benefits from the military with the [proposal] are minimal, but the burdens are significant and unsustainable.”

Are Pacific-Island Casinos Part of a Chinese Plot?

The report notes that some analysts believe Chinese investment in the region is a deliberate attempt to “erode US influence in the region to weaken the US military presence and create an opening for Chinese military access,” although it stops short of making this assertion itself.

It does, however, quote Lieutenant General Wallace “Chip” Gregson, former commander of US Marine Corps Forces, Pacific.

“The Commonwealth of the Northern Marianas and Guam are critical to our position in the Pacific,” Gregson said. “China seeks to control our access and limit our military presence through influence operations based on suspect casino operations.

“Energetic involvement by our law enforcement and financial agencies is needed to ensure these US territories are not ripped away,” he added.