Early this year, an Australian friend came to me to ask for a favor. He had moved to Macau from Melbourne in 2007 and had joined one of the U.S.-owned casinos.

“I’m having a headache,” he said, and I asked why.

“I have more than 200 people working under me and I am not sure how to allocate red packets to them for Chinese New Year,” he claimed and added, “Just putting the money into the envelopes alone is a killer.” He said, “I am an Aussie, not a Chinese. This is Chinese culture, not Aussie culture. Why should I follow their culture? I didn’t even give so much to my best friend for his wedding last year.”

I nodded calmly, almost in agreement. “This is the nature of the business of red packets,” I said. “You should learn to master it.”

For foreign casino executives working in Macau, the annual task of preparing red packets for their staff can be a nuisance. You have to decide who should receive a packet, how much to allocate to each level of employee you have, and then prepare the red packets. Because of the large number of Chinese employees working in Macau casinos, the physical task of putting cash into red envelopes can be time-consuming and tiring. Getting nice-looking red envelopes with a special design is the easy part. The harder task is getting sufficient new and clean 10 and 100 notes (in Hong Kong dollars or Macau patacas) to put into the small envelopes. For some executives the job sometimes involves getting help from their spouses and kids.

Whether one likes it or not, handing out red packets to Chinese employees during Chinese New Year is an essential business in Macau and an important Chinese custom. The business of red packets reflects many of the deep-rooted and enduring values of the Chinese people, like their belief in and celebration of their glorious past, their superstitious nature, their respect for one’s social/hierarchical position, and the constant giving and saving of “face”.

“Red packet” is known as “ang pow” in Hokkien by Chinese Singaporeans, “lei si” in Cantonese by Hong Kongers/Macanese and “hong bao” in Mandarin by mainland Chinese. Basically  it is a red envelope enclosed with money. These red envelopes used to be simple — just plain red, which is a color that symbolizes luck and wealth to the Chinese. In ancient times, the Chinese used to tie coins together with red strings and give these to their children in order to fend off evil spirits. It has now evolved into red envelopes. However, the envelopes themselves are now often decorated with auspicious words, pictures or symbols, such as carps and zodiac signs. They are considered to be auspicious as gifts and are handed out during Chinese New Year and at weddings, birthdays and other important days. Sometimes the red envelope is replaced with a gold-colored one since the color gold is also auspicious to the Chinese. Most important, the amount of money put into them should sound good and end with an even number. For example, MOP28, 68 and 188 are all good amounts to put into red packets. MOP58 is bad since it means “Won’t prosper”.

The business of red packets reflects subtle and all but forgotten superstitions and beliefs in ancient rituals and ways and the constant celebration of the past brought forward to modern Chinese society. Confucius teaches that humans are social creatures. Every person has a social role and responsibility that he or she must fulfill in order to preserve social order, leading to world harmony. Confucius stipulated the hierarchical relationships between a ruler and his subjects, a father and his sons, a husband and his wife, an older brother and his younger brother, and those between friends. Confucius’ teachings form the foundation of today’s Chinese values.

This can be observed in the business of red packets. During Chinese New Year, red packets are handed out by the old to the young. Parents will give to their children. Grandparents will give to their grandchildren. Uncles and aunts will give to their nieces and nephews. Often, the older a child, the more money he or she can expect to get. Anyone single is theoretically entitled to a red packet regardless of age. Once married, a Chinese man or woman has the responsibility to give to every unmarried individual — a signal that one has reached adulthood.

In essence, the practice of red packets teaches social segmentation based on an individual’s position. Hence, in the workplace, managers are expected to give to their subordinates. The higher the rank you occupy within the company the more you are expected to give. Staff corporate positions determine the amount of money in the red packets. A vice president of casino operations is expected to give at least on a par if not more than a director of casino operations. A director is expected to give at least on a par if not more than a shift manager. A director who gives less than his or her managers will lose face, and this must be avoided at all cost. If situations like this happen and are discovered the Chinese director may try other ways to compensate, like giving his staff an additional treat. Such behavior can be seen as a face-saving defense mechanism. Hence, it is not uncommon for managers to come together prior to Chinese New Year to decide how much to give per red packet to each employee. Lower-ranking front-line managers need to ensure that they do not give more to their dealers or subordinates than their superiors in order to preserve the face of their superiors. This is very important as Chinese managers do not like to lose face. The business of red packets reflects the importance of “face” to the Chinese.

The practice also introduces foreign casino executives to Chinese culture and ways of life. To be successful it demands that foreign executives pay respect to the history and culture of the Chinese people. The business of red packets reveals many aspects of Chinese culture and shows in no insignificant part what it takes to be successful in Macau.