Feature
In 2026, the Three Pagodas Pass region in Kyainseikgyi Township, Kayin State, saw a sharp rise in illegal gambling operations run by Chinese nationals, and online scam syndicates known as kyar phyant (fraud/call-center scam businesses). In addition there has been a dramatic expansion of sex trade (prostitution) activities throughout Three Pagodas Pass, far exceeding previous years.
From 2022–2023, when the area came increasingly under the influence and control of the Karen National Union and the Democratic Karen Benevolent Army, the number of Chinese nationals and operators involved in illicit businesses grew substantially in the Three Pagodas Pass region. Underground activities such as casino gambling, online scam compounds, brothels, and human trafficking continue to expand.
Although these businesses bring no benefit to local civilians, local administrative bodies and armed organizations have largely turned a blind eye, primarily because of the enormous financial support and tax revenues extracted from these operations.
Since 2022, when Chinese nationals first began entering the Three Pagodas Pass area in large numbers, residents have become a marginalized class under outside domination.
Local Chinese intermediaries holding Myanmar citizenship cards work with armed authorities to purchase local land plots, vacant lands, and commercially strategic areas at highly inflated prices. They built structures on these lands to facilitate illegal businesses, and this growth of the new, yet illegal businesses is steadily becoming the dominant economic force.
As this expansion widened, the Government of Thailand, aiming to create pressure and hardship for the Chinese operators. In February 2025 they suspended the electricity supply to border areas, and cut off phone and internet communications.
However, Thailand’s actions did not significantly damage the Chinese operations. Instead, local civilians suffered the most. The Chinese operators continued their businesses using large generators and solar battery systems.
Financially powerful Chinese investors, through their representatives, have rented buildings along the main road of Three Pagodas Pass town at exorbitant rates, constructed new buildings on lands they purchased, and while outwardly presenting legal front businesses, secretly run illegal operations inside. Reports also indicate that they are operating sex entertainment businesses (brothels).
As the population density of the town of Three Pagodas Pass has increased, Chinese-run enterprises have visibly expanded.
It is widely known that in Chinese-owned compounds on the U Daung Kan side, both illegal online financial scam operations and sexual entertainment (prostitution) businesses are flourishing. In addition to Chinese-run prostitution enterprises, local business owners in Three Pagodas Pass report operating open prostitution services inside their own guesthouses.
Backed by the local security protection of the Democratic Karen Benevolent Army, Chinese investors have boldly expanded their activities.
Along Bayintnaung Main Road, there was a vacant two-acre plot located beside the Mya Pan fuel station and purified drinking water business in Three Pagodas Pass town. In 2025 a large hotel known as (AAA) Hotel was built, using Chinese capital but done under the name of U Tha Pu, the business officer from DKBA Kloh Htoo Baw Strategy No. (2).
The hotel held a lavish grand opening ceremony in December 2025. According to civilians living nearby, the bungalow-style (AAA) Hotel has more than 50 rooms and maintains 24-hour security guards.
Inside the bungalow-style hotel are dining rooms, karaoke rooms, massage rooms, and lodging rooms for guests. The women employed for sexual entertainment are reportedly not ethnic women from Myanmar but foreign contract workers hired on annual agreements. Women working there are said to come from Thailand, Cambodia, Malaysia, South Korea, Japan, and Laos.
The service fees are said to be extraordinarily high, meaning only Chinese nationals, wealthy businessmen, and members of armed organizations can afford to stay at the hotel.
Those unable to afford the hotel seek cheaper services at local guest houses such as La Min, Ingyin Pan, Thazin Oo, and in discreetly operated brothel houses around town.
In Three Pagodas Pass town, which now has a population of over 50,000, only about one-third of residents work as laborers engaged in farming and manual work. The rest are traders, brokers, human traffickers, gambling operators, and businessmen involved in underground industries such as casinos and scam centers.
Throughout Three Pagodas Pass town, proxies continue to construct more buildings for Chinese operators. Additional residential compounds for Chinese settlement are also being built around the region. There is one such operation near the natural swimming pool close to Kyauk Ba Lu village on about 40 acres of land. Another called, DKBA Commander Saw A One’s Natural Chaung Sone Waterfall site, and another around Krain Chaung village which is under DKBA-administered Kloh Htoo Baw territory.
If this trend continues, Three Pagodas Pass — a town that since its establishment in 1992 had developed through self-reliance, timber businesses, furniture workshops, 24-hour electricity, and a relatively peaceful environment — may no longer be recoverable after becoming a haven for criminal opportunists engaged in gambling, fraud, exploitation, and coercive domination.
