Officials felt a new set of regulations was needed to better control the cash flow in the world’s largest gambling hub.
Luxury casinos and hotels, special tables for high-rollers and everything a true gambler’s heart could desire. Over the past few years, Macau has drawn a record number of players from all over the world and has become the world’s most popular gambling destination.
The perspective of huge profits and a flourishing economy certainly makes authorities do whatever stands in their power to support the local industry, whether it’s through favorable Macanese gambling laws or other regulations designed to help casino businesses grow.
With billions of dollars being spent here every year, local authorities have decided it was time to implement new measures that will allow them to monitor and control transactions more efficiently. Starting next month, jewelry and watch retailers operating in casinos will be banned from adding new card devices.
A tighter grip on transactions
But the amount of money being spent in Macau turns out to be overwhelming and officials are looking for better ways to watch and control the cash flow.
The latest financial reports show that Macau’s most profitable casino developers are:
• Las Vegas Sands
• Melco Crown Entertainment
• Wynn Resorts
Recently, the local government asked banks to monitor large transactions – cash or card – more closely. Francis Tam, the city’s secretary for economy and finance, told reporters that jewelers who have shops in casinos weren’t asked to move out or stop their activity, but they were forbidden to add new card devices.
In local gambling news, Steven Leung, a director at UOB Kay Hian told reporters: “Macau government clarified the policy on the use of cash cards, that it hasn’t asked jewelers to move out of casinos. It gives investors some degree of comfort to bargain hunt.”
It is said that the new regulations are part of a crackdown on the use of state-backed China UnionPay Co.’s hand-held card swipers in casino resorts. Authorities fear that illicit funds are being taken out of the mainland into Macau.
Casino shares rise
One of the consequences of the new measure announced by authorities in Macau was that casino shares have gone up.
Take Galaxy Entertainment Group Ltd. for example, the gambling company which helped businessman Lui Che-woo turn into a billionaire. Its shares have gone up 3.7%, representing the biggest progress since May 30, reaching almost HK $59.50.
Analysts say that casino magnate Sheldon Adelson’s company, Sands China Ltd, has 22% market share in Macau. The first quarter of 2014 brought the firm a record revenue of $4.01 billion, the highest in the industry. Now Sands shares have climbed 4% to HK $57.20.
Steve Wynn’s company Wynn Macau Ltd is doing even better. The casino developer jumped 5.5%, while MGM China Holdings Ltd rose a more modest 3.7%. The news also helped SJM Holdings and Melco Crown Entertainment Ltd go up 3%.
According to the statement released by the secretary of economy and finance, local authorities may also step up scrutiny of card deals in casinos. However, officials are waiting for the appropriate time to introduce these measures and it is unlikely that it will happen in the near future.
In February and March, the police in Macau arrested 12 people after finding that they had been illegally using mobile card-swiping devices from UnionPay. As the only region in China where casinos are legal, Macau could easily be exposed to illicit activity. According to police officers, the crackdown is meant to stop gamblers from using the devices to get cash in casinos.
For now, Macau’s Monetary Authority decided to order luxury goods retailers who have shops on casino floors to remove their UnionPay card terminals by July 1.