Scientific Game

New China bankcard policy to have minimal impact on Macau: analysts

Tuesday, 02 January 2018 16:03
Visit us

Macau’s gaming industry is unlikely to be impacted by a new policy implemented in China targeting capital outflow, according to Macau-based analyst Grant Govertsen.

China’s State Administration of Foreign Exchange rolled out its latest policy, effective immediately, over the weekend which applies to all types of bankcards and limits the total overseas withdrawal capabilities of an individual to RMB100,000 (US$15,000) per year regardless of how many accounts they have. It represents a significant upgrade on previous restrictions which limited individuals to RMB per account per year, meaning the more accounts someone held the more money they could withdraw.

The new rules will also see those who exceed their annual overseas cash withdrawal have their ATM cash withdrawal abilities suspended for the rest of the year plus the following year.

However, Govertsen says the policy is unlikely to have any measurable impact on Macau’s gaming market if other recent restrictions such as the lowering of daily withdrawal limits and implementation of facial recognition technology on ATMs is any indication.

“We expect this latest restriction to be no different,” said Govertsen, adding that the new restrictions are not targeted at Macau but on all overseas transactions.

First, the limit of US$15,000 per individual per year (rather than per account per year) would only potentially impact premium mass players given that lower-tier mass players average annual theoretical GGR contributions lower than $15k and that VIP players are playing on credit.

“Second, it is quite likely that many premium mass players have established overseas bank accounts already, which would not be impacted by domestic bankcard restrictions. Third, we believe that using bankcards to withdraw cash from ATMs has always been more of a last-choice option anyway given the lack of limits on bankcard purchases. Put together, we would not expect there to be any measurable impact on Macau GGR, although perhaps at the margin some very small number of premium mass players could migrate to VIP.”

Brokerage Sanford C Bernstein is slightly more cautious, suggesting the policy could have some impact on mass market as well as the lower end of premium. “According to feedback in our 2017 China Premium Consumer Usage & Attitudes Survey, over 40% of Macau gaming respondents withdraw cash from ATMs using China UnionPay cards,” Bernstein analysts said.

“Overall, the new policies may portend further capital controls to come in 2018. We would continue to caution that the possibility of further capital control restrictions/scrutiny may be forthcoming (although they may not be directed specifically at Macau).

While these new policies may create some headwind to GGR in 2018, the bigger concern would be continued clamp downs on capital movement out of China. The most significant headwinds on GGR would occur if there are limits placed on Macau's pawnshop system or greater crackdowns on underground banking channels, for example.”


What's new

Stars align for Silver Heritage as Tiger Palace Resort’s Grand Opening draws record crowd

Stars align for Silver Heritage as Tiger Palace Resort’s Grand Opening draws record crowd There was a full-scale Bollywood party going on inside Tiger Palace Resort on Saturday night but it was owner and operator Silver Heritage Group celebrating the hardest afterwards with the huge crowd and fully booked hotel seeing revenue records tumble. Silver Heritage might not have planned on spe... Sunday, 18 March 2018 17:08

Sands China declares HK$1.00 final 2017 dividend

Sands China declares HK$1.00 final 2017 dividend Sands China has declared a final dividend of HK$1.00 per share for the year ended 31 December 2017, subject to approval at the company’s upcoming AGM. If approved, the proposed final dividend will be paid on Friday 22 June 2018. Sands China previously announced net revenues of HK$60.3 billion (U... Sunday, 18 March 2018 08:17

Imperial Pacific to ask for more time to complete Saipan resort

Imperial Pacific to ask for more time to complete Saipan resort Saipan casino operator Imperial Pacific International (IPI) could ask for a further extension on its time frame for completion of Imperial Pacific Resort, according to Executive Director of the Commonwealth Casino Commission Edward Deleon Guerrero. As reported by Marianas Variety, Guerrero met with... Saturday, 17 March 2018 18:58

VIP soars past mass in 2017 to claim 65% of NagaWorld revenue share

VIP soars past mass in 2017 to claim 65% of NagaWorld revenue share VIP gaming has taken over from mass as the primary revenue source for Cambodian integrated resort NagaWorld, with 65% of all revenue coming from VIP in 2017 compared to just 42% in the previous year. The breakdown forms part of NagaWorld owner and operator NagaCorp’s 2017 annual report, released ... Saturday, 17 March 2018 14:50

Current Issue

MGM “all-in” on Cotai

MGM “all-in” on Cotai Almost five years to the day since MGM first broke ground on its second Macau integrated resort, MGM Cotai finally opened its doors to the public on 13 February with the US$3.4 billion investment pinning its future on the premium mass market and an array of innovative features. By Ben Blaschke “... Tuesday, 27 February 2018 14:50

European vacation

European vacation Novomatic is targeting both the US and Asian markets with its recent acquisition of a 52% stake in Australian slot machine developer Ainsworth Game Technology.By Ben Blaschke WHEN Austrian gaming giant Novomatic Group confirmed the completion of its AU$500 million purchase of a 52.2% stake in Austra... Tuesday, 27 February 2018 14:48

Problem solving

Problem solving Inside Asian Gaming speaks with Davis Fong, Associate Professor in International Integrated Resort Management and Director of Institute for the Study of Commercial Gaming at the University of Macau’s Faculty of Business Administration, about the extent of gambling disorders in the Asian gaming hub... Tuesday, 27 February 2018 14:44

Gaming and the nine intelligences

Gaming and the nine intelligences Sudhir Kale explores the nine types of intelligence as defined by Harvard psychologist Howard Gardner and how they apply to the gaming industry.  DURING my decades of involvement in the gaming industry, I have had the pleasure of knowing many senior executives from all over the world. They are all... Tuesday, 27 February 2018 14:40