Inside Asian Gaming

inside asian gaming January 2016 42 UnionPay Under Scrutiny in Macau The Monetary Authority of Macao is cracking down on the abuse of UnionPay bank cards, issued to mainland Chinese visitors, who use them to get around limits imposed on cross border cash withdrawals and fund their gambling. On December 11 the Authority issued a statement saying it would implement a real time monitoring system for payments made via the cards, at first covering “high-risk merchants near casinos, most of which are jewellery and watches merchants.” It added, “The real time monitoring system will be extended to other high- risk merchants selling high value products in the second phase.” The announcement came days after China UnionPay itself ordered a clampdown on point of sale (POS) machines; registered in the mainland and then modified to process transactions in Macau while making them appear as if they had taken place in China. UnionPay said its measures would involve an audit of such devices, and penalties for failure to comply with the rules. UnionPay has the monopoly on bank cards in China, and mainland cardholders using ATM machines overseas are only allowed to withdraw the equivalent of 20,000 yuan per day. To fund gambling in Macao, they have often been using their cards to buy high-value items from jewelry shops or pawnbrokers near to casinos, before immediately selling them back to the shop owners for cash. Analysts say the authorities have previously tolerated such transactions, and estimate they make up 10 to 15 percent of all cash accessed by mainlander gamblers in Macau. Unsurprisingly they also say the clampdown measures could reduce the territory’s Gross Gaming Revenue; by 5 percent or more. Desperate Measures for Desperate Times At a press conference Macau’s Secretary for Security Wong Sio Chak said gaming-related crimes rose by 33.6% year-on-year in the first nine months of 2015. Cases of unlawful detention, typically associated with loan sharks, were up 135% to 308 in the same period he said, while cases of usury (unlawful money lending) rose 36% to 240. In an interview published by Bloomberg, meanwhile, Macau Junket Operators’ Association president Kwok Chi Chung said his members are now only able to collect 20 to 30% of their debts, compared to 70% repaid promptly in 2013. “With a longer payback period, junkets have less money to lend to new customers, and the business size is shrinking accordingly,” Kwok was quoted as saying. Junket operators arrange trips to casinos for high rollers, and extend gambling credit in return for a percentage of the revenue they bring in. Chinese president Xi Jinping’s crackdown on corruption has hit the operators hard, not only because it has dampened the flow of rich gamblers into Macau, but also because it has disrupted the cross-border underground banking system they rely on for liquidity. While Macau’s gross gaming revenue fell by roughly a third in 2015, the turnover of junket operators over the year has dropped by about a half. REGIONAL BRIEFS Curious Findings from Macau Tourism Study A Macau Institute for Tourism Studies survey aimed at providing planners and decision makers in the tourism industry with “innovative and meaningful research” has instead highlighted what they already knew: that most foreigners visiting the city lie about why they come.