Macau to increase government supervision of casinos – The Edge Markets MY

A general view shows casinos and hotels following the coronavirus outbreak in Macau, China Feb 5, 2020. (File photo by Reuters)

HONG KONG (Sept 14): Macau wants government representatives to supervise casino operators and plans to increase local ownership in gaming companies, signalling tighter control over the worlds largest gambling hub amid Beijings efforts to clamp down on money laundering and currency outflows.

The government aims to increase direct supervising in gaming companies to better monitor their operations, Macaus Secretary for Economy and Finance Lei Wai Nong said in a press briefing on Tuesday, without elaborating how the proposed changes will be enacted. Officials also suggested raising the shareholdings of local directors in gaming companies from the currently required minimum of 10%, according to a public consultation paper on the proposal.

Authorities also proposed to increase scrutiny on the so-called junkets which service high-rollers and extend credit to them, including raising entry barriers for junket operators as well as allowing background checks. The proposed changes could be made in a long-gestating revision of the casino law, which will be passed ahead of Macaus issuance of new gaming licences to operators. Current gaming licences expire in June 2022.

China has been clamping down on activity by so-called VIP punters in Macau for several years now over concerns that the high-stakes betting there which takes place in convertible Hong Kong dollars can sometimes be an illicit channel of currency outflow and money-laundering efforts. Beijing has also cracked down on organized gambling trips to Macau and other overseas destinations by junkets.

The development of the gaming industry has evidently driven local economic and social development, but has also created some social problems, said Lei.

The governments proposal also includes reviewing the number of gaming licences and their terms. The current licences came with a 20-year effective period. Officials will consult the industry and public for 45 days before reaching a final bill to be tabled to the local legislature.

Macau, whose economy is almost entirely reliant on casinos, has been languishing during the pandemic as border curbs prevented its lifeblood of Chinese punters from entering the city. Gaming revenue for the month of August was 82% lower than the same month in 2019.

The government has been seeking ways to weed out potential illegal activities, including the possibility of introducing a digital currency to better combat money laundering and tax evasion.

While China has been tightening its scrutiny over Macaus gaming sector for years, this move comes as Beijing undertakes a widespread crackdown on business and society. While initially focused on the growing influence of Chinas tech giants, the campaign has taken on a moralistic tone, targeting childrens video game use to after-school tutoring. The Communist Party has long had a dim view of gambling.

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Macau to increase government supervision of casinos - The Edge Markets MY