Thursday, October 21, 2010

MacDougall Exchange

A fellow contacted me no too long ago and wanted to know if I'd be willing to sell the two MacDougall press photographs that appeared in my blog post Two Historic Michael MacDougall Press Photos. He said he was a long time MacDougall collector and that it would mean a great deal to him to add these two photographs to his collection.

I replied immediately and told him that he should feel free to make me an offer. I also let him know that I would pretty much agree to whatever he wanted to pay for them because I felt that it was most important that these historic photos end up in good hands. So, the fellow replied right away with an offer that included a fair price as well as an old MacDougall book in exchange. I accepted the offer and we made it happen. The press photographs are now in his possession and I ended up with an early edition of Don't be a Sucker, by the famous "gambling detective" Michael (aka Mickey) MacDougall.

The book is an 80 page staple-bound booklet with lots of images. Some materials have been lifted from crooked gambling supply catalogs, in exposé fashion. The images of the false deals are very similar to the press photograph of the bottom deal that I sold in exchange for the book. In fact, I had to do a side by side comparison to see the difference.

Overall, I am glad that the press photograph ended up in the hands of a true MacDougall collector and I'm also happy to have added an old gambling book on my shelf.

Monday, October 11, 2010

Casino Gambling Inside North Korea

A couple of years ago I stumbled upon some information on the internet, that there might be a casino in North Korea. Due to the fact that North Korea is portrayed in Western media as the most secretive and isolated country in the world, described by former CIA Director Robert Gates as "the intelligence black hole," this information came as a bit of a shock. The idea of a North Korean casino spiked my interest, so I searched some more. But all the information I was able to find on the internet was unclear and speculative. One site said that there might be one casino in the capital city of Pyongyang, but that this information had not been confirmed. Another site said that there definitely was a casino there. And another site said that there used to be a casino there, but that it had been closed down. There was also some speculation that there might actually be two casinos in the entire country, one in Pyongyang and the other one in an unnamed town near the Chinese border. The more I searched for answers the more conflicting information I was getting. It simply drove me nuts. For some reason I was never able to get this out of my mind and after a couple of years I decided to do the only sane thing I could think of: to travel to North Korea and see for myself.

Although North Korea is a country whose economy has been hit very hard because of economic sanctions, traveling to North Korea is not cheap. But fortunately, I happen to have a special interest in Korean culture (not politics), so I had another reason to go there. The more I thought about it, the more I was convinced that it would be a great thing to visit that country, and if in fact there was a casino there, I would definitely get to see it.

Although I am far from being an expert in North Korean affairs, I was pretty sure that gambling had to be illegal in that country. That meant that the casino, if there in fact was one, had to be reserved for foreigners. But what foreigners? North Korean immigration officers are not exactly known to be the busiest people in the world and according to some internet resources the country averages about 2,000 visitors per year. And what percentage of those can be expected to put down a wager, anyway? So, who in the right state of mind would build a casino there? Answers to those questions could not be found on the internet, so I hopped on a plane.

This was not the first time I traveled a distance just to check out a piece of information that had to do with gambling. In the world of gambling there's actually an old tradition of traveling far just to learn something or to meet with someone. Usually it's about learning a secret that has to do with cheating, such as learning a dice switch, a card muck or having the chance to see a cheating gaff. And I've done that, but I'll also go halfway around the world just to check out a casino, if I think it's worth it. And it was pretty clear to me that my mind would not rest until I saw with my own eyes what kind of casino they had in North Korea. So, off I went.

As it turns out, there is in fact a casino in North Korea. Not one, but three. One casino is in the capital city, Pyongyang, another one is in the border town of Sinuiju, next to Dandong, China, and another one in the Rajin-Sunbong Free Trade Zone (a location that I was having some trouble finding through Google Earth, although I did manage to find a web site for the Emperor Hotel & Casino, Rason). Since I only visited Pyongyang I can only report about the casino there.

The Casino Pyongyang, as it is called, is located in the basement of the Yanggakdo Hotel, which is where I stayed. The hotel is a 47 story skyscraper with a triangular footprint, situated on an island, on the Taedong River.

The following photo shows the north façade of the hotel. The south façade is a bit different, which you can see in the night photograph I took during my visit.

There are two ways to descend to the casino level from the ground floor. You can either take an elevator or you can walk down a staircase. Since Pyongyang is not Las Vegas one should not expect to find any flashing neon signs publicizing the presence of a casino. The biggest sign you will find is a modest billboard mounted on a light box, hanging on the wall above the staircase. The only detail that might have been inspired by flashy Las Vegas signs is a single string of multicolored Christmas lights surrounding the billboard (and the upper left corner came loose).

The staircase takes you down to the lower level where you are greeted by a hostess behind a counter and a security guard that is often found "clipping his nails" (figuratively speaking) while lounging on this chair underneath the staircase. You will also notice a couple of rows of slot machines against the walls leading to the casino. The hostess is actually guarding the entrance to the karaoke bar, which is straight ahead. The basement entertainment complex also has a restaurant, a spa that I am told offers more than massages, and of course the casino.

There is one detail on the lower level that offers some clues as to who might be behind the casino. As you take the last step down the staircase and set your foot onto the "Welcome" mat you can't miss a "magnificent" mural photograph of a casino in Macau. The casino is none other than the Casino Lisboa, owned by Stanley Ho. Also, the restaurant on the lower level is called the Macau restaurant. So, it doesn't take a genius to figure out that Casino Pyongyang is most likely part of the Ho casino empire.

There are some additional details that lead me to believe that the entire entertainment complex in the basement is part of the same company. You will notice surveillance cameras on the ceiling above the mural. There's good reason to believe that this surveillance coverage is part of the casino.

Also, although the casino officially starts in a separate room there are several rows of slot machines that extend into the corridors that lead up to the casino. No one seems to be playing those slots, but that's irrelevant. Their presence is enough to say that gambling starts as soon as you step on the "Welcome" mat.

It also doesn't take a genius to figure out that the spa, which I am told is exclusively female staffed and caters to Chinese businessmen, is really just a brothel. Macau is flooded with those kind of "massage parlors" and although they appear to be independent businesses, completely separate from the casinos, it would be a bit naïve to believe that there's no connection.

All these clues lead me to believe that the casino is what had financed the entire hotel. If I were to take a guess I'd say that Stanly Ho is just betting that there will come a day when things will drastically change in the DPRK and he just wants to make sure he's got his foot in the door. The operation of a small casino in the heart of Pyongyang is enough to create a corrupt government that will eventually push for casino gambling, when the time comes. One day casino gambling might prove to be the biggest boost to the economy of a country that might not have much else to offer to all developed neighboring countries.

Perhaps it's also not a coincidence that the casino was built on an island. I don't have a hard time imagining how the entire island might one day become the next gambling mecca of Asia, especially if there's any opposition to gambling, it might just be easier to convince the opposition that the entire island can become some kind of Special Administrative Region where gambling is allowed. This is Asia after all, and Stanley Ho is a very smart man. He started casino gambling in Macau at a time when there was nothing there. Now money is too sweet to kick the casinos out. Plus, casinos have become a "tradition" in Macau and kicking them out would almost feel like messing with the "cultural heritage" of the region.

North Korea is a communist country and it would stand to reason that private businesses are not allowed there. One would think that even if there were a way to open a private business, a casino would be at the bottom of the list of approved businesses. But sometimes there are loopholes that might be exploited, even in the DPRK, especially if one has enough money to convince the officials that something is a good idea.

If my information is correct, some forms of private businesses are allowed in the DPRK. I was told that foreign investors have a way to open up what is described as joint ventures. This makes a lot of sense and I can see how a casino investor might actually think that this model is the best way to run a casino in a country like North Korea.

Casino business requires a lot of corruption. I can't think of a better way to bribe the officials than to make them business partners in a so-called joint venture. A joint venture model basically ensures that money constantly flows into the right hands without breaking the law. And when the time comes the investor will have plenty of powerful allies at the very top of the government, motivated by the one medium that has historically been proven to be the greatest catalyst of all times: money. Of course, they'll all be talking about how casino business is good for the region, how it creates jobs and brings money that can be used to build schools and hospitals. Nothing we haven't heard before. And anyone investing into casinos in the DPRK, today, is way ahead of any American corporations that might one day want to get a piece of this action. After all, Pyongyang is in Asia, the home of the most passionate gamblers on the planet.

North Korea's geographic location is quite interesting for someone that wants to put his foot in the door on the off chance that there will be a drastic change in the country's system. China is to the north-west, Russia is to the north-east and South Korea is to the south. Japan is also just a stone throw away, hardly a distance for someone that is itching to put down a wager and is unable to do it at home. So, who knows what the future holds.

In the meantime let's have a closer look at the casino.

The easiest way to find the entrance to the casino is to follow the slot machines. As you approach the casino you will pass by a few laminated paper signs informing you of the business hours and other rules. There is even a welcoming sign that says the casino reserves the right to reject any customers without giving any reasons, which should make anyone feel welcome. The signs are in two languages, the universal English and Chinese. The absence of Korean language signs is not coincidental; the casino is just for foreigners and Koreans are not allowed to enter the casino under any circumstances.

When I first entered the casino I started talking to one of the staff that looked like a pit boss, manager or supervisor. I have some limited knowledge of Korean, so I started talking to him in Korean. I was having trouble getting myself understood and I assumed the guy must have been having a hard time understanding my accent. As a general rule, if a foreigner tries to speak Korean to Koreans, they will not understand a single word, unless the pronunciation is exactly as it should be. This is especially so in North Korea, because people there have almost no contact with the outside world, and therefore don't have an ear for accents. But as it turns out, the guy was not having trouble understanding me because of my foreign accent. He just didn't speak a word of Korean.

Once we switched to English he explained to me that the entire casino staff were Chines, from Dandong. He explained that the rule that no Koreans were allowed to enter the casino extended also to the staff. Apparently it is not a prerequisite for a foreign investor to guarantee new jobs for local people, to be approved for a "joint venture" in North Korea. I guess, when the time comes, the local casino advocates will not be able to use the argument that casinos create jobs.

I asked the guy a few questions about the casino and he was able to confirm my suspicion that Casino Pyongyang was in fact a Macau investment and that there was another casino in the border town of Sinuiju. He didn't mention Stanley Ho, directly, but it is quite logical that no one else couldn't possibly be behind the Macau investment. In Macau there's Stanley Ho, who is a Chinese businessman, and there are a few American corporations behind the Wynn, the Sands, the Venetian, MGM, etc... If I were to make a bet I'd put my money on Stanley Ho.

The casino entrance is not at all flashy. It has a simple sign that says Casino Pyongyang in three languages. Although I am a bit puzzled why they have it written in Korean, since Koreans aren't allowed inside the casino.

At the time of my visit the double wing door under the sign was locked. So, to enter the casino I had to walk through the long corridor at the right side.

The casino floor is quite small. There were only four tables, two for blackjack and two for baccarat. The players were mostly Chinese and I've been told that no one ever walks away with winnings.

The next few photographs offer a glimpse inside of the Pyongyang casino, with players in action. Normally casinos do not allow photography on the floor, but in North Korea people are really laid back about photographers and it didn't seem that anyone had any objections to the presence of a camera inside the casino. So I took plenty of photos.

Blackjack is dealt without a hole card and there are some rules that aren't standard. For example, when a player catches a natural, the player has the option to collect 1 to 1 immediately or wait for the dealer to play out the hand for the house. If the dealer busts or gets a total less than 21, the player collects 3 to 2 at that time, but if the dealer hits 21 the player gets nothing. I've seen this option in some casinos and it's obviously a sucker bet.

The tables are not laid out around a pit, as in most casinos. Instead the tables are against the walls and every time there is action there is a supervisor watching the game.

During one of the games a floor manager was standing next to one of the players and chatting in English. I was a bit surprised to see that the floor manager was giving direct advice to the player on making certain hit and stand decisions. He also explained to the player that it is possible to bet on some suited outcomes and get paid more, so I guess he just wanted to make sure the player knew what all the betting options were. In other words, the casino tried hard to sell all the sucker bets.

The procedures are a bit different from most casinos. For example, the player's cards are not dealt out in diagonal columns, as in all other casinos, but instead into a fan. Also, it is quite odd how the dealer pays the winning bets. Let's say the player bets one chip and wins. The dealer will first pull the chip slightly towards the chip tray, by placing the hand or the finger over the wager and then pay the bet by placing another chip right on top of the original wager. If the player gets paid 3 to 2 on a natural the dealer will simply count off the chips out of the chip tray and place the payout on top of the original wager, without ever doing a spread for the camera. I've never seen that done in any casino as there are clearly too many opportunities to manipulate the payout.

There is one procedure that defies logic. After the players are done making their hit and stand decisions the dealer burns a card before dealing the first hit card for the house (which is really the second card, since there's no hole card). As a general rule, the purpose of burn cards is to eliminate the top card of the shoe as a precaution, in case the cards are marked. It makes absolutely no sense to burn a card before dealing out the hand for the dealer, since the players no longer make any decisions, at that point. Better yet, the shoe actually has a black fabric blind over the faceplate, covering up the top card, so even if the cards were marked no one could see the top card. And if a player sits down at a vacant table the dealer will start dealing straight from the shoe, without burning a card. If you ask me, that would be a better time to burn a card, but they don't do it that way.

I expected that the blackjack game in Pyongyang would have some local options and procedures. I am not sure it's the best game for the player, even if one ignores all the sucker betting options. The casino still pays 3 to 2 on naturals, but they only allow doubling down on 11. Since this is basically a resort casino I wonder if they will soon introduce 6 to 5 payouts on naturals.

Lastly, the casino is not yet equipped with continuous shufflers that are becoming the industry standard around the world. But here is a picture of their blackjack dealing shoe. Quite slick.

Due to the fact that Koreans are not allowed to set foot inside the casino and foreigners are not allowed to handle Korean currency, the official currency in the casino are Euros, but they accept US Dollars, as well. You are advised to bring plenty of small bills, because if you are left with small denomination chips the cage might not have bills to pay out. So, you'd either have to return to the gaming tables or take the small chips as souvenirs, which they don't mind. Speaking of small denomination chips, here's one.

On my way out of the casino I noticed a sign with a picture of a camera and something written in Chinese. Since I can't read Chinese I had no clue what the sign meant, so I took a picture of it, too. Should anyone reading this article know the meaning of this sign, please do let me know, so I can make a mental note for future reference.

To be perfectly honest, I expected the casino in Pyongyang to have much stricter procedures, due to the fact that it's in North Korea. I don't think I have to explain how North Korea is portrayed in Western media, so I simply expected the casino procedures to match that image. Mainly, I was assuming that it would be somewhat of a procedure to enter the casino floor. Even in Europe, in most casinos, they check ID, take your picture and sometimes issue a free "membership card" that needs to be scanned on all future visits. I knew the Pyongyang casino could not require to check passports because all foreigners must surrender their passports after entering the country. But I still thought there would be some kind of strict procedure before entering. There was absolutely nothing. Anyone could simply walk into the casino and I am not even sure how they make sure that a person is not Korean.