Inside Asian Gaming

inside asian gaming July 2014 42 Tam: UnionPay TerminalsWill Stay in Macau’s Casinos The Macau government will not order the removal of existing UnionPay card-swipe terminals from jewelry stores and pawnshops in casinos, but the retailers will not be allowed to install new ones, the city’s top financial official announced on 25th June. The comment by Secretary for Economy and Finance Francis Tam put an end to speculation that the government had set a deadline of 1st July for the shops to remove the terminals, which have been in the spotlight in recent weeks amid news reports that unauthorized terminals are being smuggled into the city from mainland China in large numbers to assist mainland gamblers in evading the country’s strict currency controls. “We have made a decision that starting July there will be no more increase in the card activities in all businesses or operations inside casinos, meaning there will be no increase of card terminals in jewelry and watch stores or other financial institutions on casino floors,” Mr Tam said. He added that “After reviewing [the new measure] for a few months we do not rule out that we will completely suppress all such card transactions on casino floors,” and he said “three to four months” would be enough time to consider whether to do so. He did not clarify whether “transactions” refers to UnionPay terminals only or other swipe devices as well. Reports of a Beijing-directed crackdown on illegal use of the popular state-backed payment card has sent jitters through the investment community, adding to a spate of negative headlines in recent weeks that has sent the stocks of Macau’s six Hong Kong- listed casino concessionaires tumbling. The worry over UnionPay is that any serious restrictions on card use would dampen the territory’s world-leading gaming revenues, which are fueled to no small degree by the ability of mainland visitors to take more cash out of China than is legally allowed. Legally, mainland citizens can take 20,000 yuan (US$3,200) out of the country per visit and withdraw up to 10,000 yuan a day from cash machines outside the country. Visitors to Macau are known to get around the limits by buying expensive items in stores using their UnionPay cards which they then return for cash refunds minus a small commission to the store. Government figures show illegal UnionPay transactions in Macau totaling US$22.5 million from January through May, which is only a fraction of an underground market that may have allowed the yuan equivalent of US$6.4 billion to leak out of China last year, according to reports in the South China Morning Post and elsewhere, or about 14% of the $45 billion the casinos made in gaming revenue. Macau authorities also have vowed to more closely monitor the roles that state-owned banks and at least one mainland-based payments processor may have played in facilitating the transactions. Mr Tam did not address that issue specifically but said, “We have an international obligation as well as our own statutory requirements to supervise and curb money laundering and terrorism financing, which we have put in the first place over other matters or so-called impacts.” The total of all transactions conducted with UnionPay cards in Macau in 2013 amounted to US$22.5 billion, according to a source cited by Reuters . CoD Manila’s New Price Tag: $840 Million REGIONAL BRIEFS Melco Crown Entertainment’s Philippine subsidiary is looking to raise up to US$129 million in a share offering to help fund a $160 million increase in its budget for City of Dreams Manila. PSX-listed Melco Crown (Philippines) Resorts is offering as many as 485.2 million shares at 11.30 to 11.70 pesos each, according to terms of the deal obtained by Bloomberg News . The offering was announced as the budget for the first phase of the super-resort, slated to open in October at Entertainment City, a government-sponsored gaming complex on Manila Bay, was boosted from $680 million to $840 million. City of Dreams has seen its budget raised twice. It was increased by 10% last October. The project is a partnership between Melco and local resort developer Belle Corp., an arm of Philippine retail and property giant SM Group. Four resorts are licensed for Entertainment City in all. City of Dreams will be the second to open. The first, Solaire Resort & Casino, controlled by PSX-listed Bloomberry Resorts, opened last March. The third will be Kazuo Okada’s Manila Bay Resorts, scheduled to open in 2015. PSX-listed Travellers International, which operates the country’s largest and most lucrative casino, Resorts World Manila, has the fourth license and has tentative plans to open in 2016. Melco Crown Entertainment is a partnership between Macau casino tycoon Lawrence Ho and Australia’s Crown Resorts, which is controlled by billionaire James Packer. Nasdaq-listed Melco operates two casinos in Macau and a citywide chain of machine gaming parlors and is developing a second megaresort in Macau, Studio City, which is slated to open next year in the territory’s booming Cotai gaming district. City of DreamsManila is the company’s first joint venture outside Rendering of City of Dreams Manila