MACAU BUSINESS
speculated that these measures also serve as a strategy by Beijing to curb capital outflow amid an economic slowdown. Peng Peng, the head of a think tank affiliated with the Guangdong provincial government, highlighted the evolution of the illegal money exchange business in Macau.
In an interview with the South China Morning Post, he stated, “While the illegal money exchange business in Macau might have stemmed from the gambling industry, it has been expanded to serve the function of underground banks and is a very common channel for corruption and illegal money outflow.” “In order to protect China’s financial security, tackle the problem of corruption, and prevent the illegal outflow of money, the government sees a need to hinder the illegal industry of money exchange,” the Hong Kong newspaper quoted him as saying. .
STEADY DEMAND
Despite the crackdown on this illicit funding channel for gamblers, the impact on the Macau gaming industry appears limited. Analysts from
– Chen Shiqu, an official from the Ministry of Public Security
As these [money exchange] gangs rapidly expand in size, they have triggered a surge in various other crimes such as theft, fraud, robbery, kidnapping, and even murder. These activities destabilise both Macau and the mainland
that we’ve seen over the past decade.” According to the local gaming regulator, the Gaming Inspection and Coordination Bureau (DICJ), gross gaming revenue surged by 41.9 percent year-on-year to MOP113.75 billion in the first half of the current year. This figure represents a recovery to 76 percent of the pre-Covid volume recorded in 2019. While junket veteran Mr. U believes that the crackdown will likely not significantly impact the VIP segment and high-end patrons, he suggests that the mass market could face repercussions. “There might be some impact on the mass market as these gangs have been increasingly targeting gamblers from that sector, especially young individuals,” he adds.
This ongoing clampdown on illegal money exchanges in Macau, alongside a slowing mainland economy, could weigh on the performance of the Macau gaming industry, brokerage Jefferies added. “Macau continues moderate post-COVID recovery, but China’s macro-overhang remains a barrier,” the analysts wrote.
Luis Pereira,
Managing Director of ASEAN Gaming Summit and Asia Gaming Brief
Citigroup expressed their belief in the industry’s resilience, noting that most players from the mainland possess various means to move money to Macau, with sufficient resources to wager substantial amounts. “We continue to believe that most players in Macau have their own legitimate ways to get their funds over to Macau, sufficient for them to bet as much as HK$1 million [per] hand,” the analysts wrote in a recent research note. Addressing investor concerns, Citigroup analysts stated that fears may have been exaggerated. “[W]ager per player in July 2024 has recovered to HK$21,193 (15-percent higher than June 2024’s HK$18,478). Our survey once again indicates that gaming demand remains robust,” they added. Echoing a positive sentiment, J.P. Morgan, another brokerage, acknowledged decent demand during the summer holidays in Macau, despite worries surrounding the crackdown on illegal fund exchange operations. The investment bank highlighted the central government’s longstanding commitment to combating such activities, noting, “We feel the overall tone/initiative… is quite similar to those
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