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Organized crime and politics have been traditionally intertwined in Macau. During the colonial era, the Portuguese administration was characterized by bureaucratic corruption and a cozy relationship with casino capitalists. The colonial state had limited autonomy vis-a`-vis the casino capitalists. With the growth of tourism and the associated casino industry in Macau during the 1990s, organized crime groups penetrated various casinos and emerged as a baffling problem. Yet, neither the Portuguese administration nor the casino capitalists had the capability to contain the use of violence by organized crime groups. As Macau approached the end of the Portuguese colonial rule, the People's Republic of China (PRC) decided to intervene in the rapidly deteriorating law and order. The Chinese intervention took the forms of stationing the People's Liberation Army in the Macau Special Administrative Region (SAR), penalizing the triad boss Wan Kuok-kuoi, and supporting the new Edmund Ho Government's attempts at civil service reforms.
The SAR Government also liberalized the casino industry by embracing American investment. Due to market competition, the local casino capitalists have been forced to improve the management of casinos and to minimize the infiltration of triads. Unlike the colonial state, the post-colonial state in the Macau SAR has enhanced its relative autonomy vis-a`-vis the local casino capitalists, directly or indirectly curbing the detrimental impact of organized crime. The case study of Macau is illustrative of the critical role of state autonomy vis-a`-vis casino capitalists, whose previous monopoly over casino management encountered the infiltration of organized crime that grasped the opportunities for maximizing profits in the era of the rapidly expanding casino industry. The Macau example also demonstrates the city-state's use of market competition as a means to improve casino management and to contain the spread of organized crime at least in the short run. © 2005 Taylor & Francis Group Ltd.