New currency rules could negatively impact Macau Casinos

The local branch of global brokerage Sanford C Bernstein & Company reportedly said it was too early to say how the recently tightened foreign currency trading rules would affect the Macau casino industry.

The updated regulations were first revealed through a revised judicial interpretation from officials in Beijing in the last days of January and are likely to seriously hurt junket operators as they often rely on underground banks to transfer funds between Macau and mainland China.

But analysts from Sanford C Bernstein & Company’s Hong Kong-based division Kelsey Zhu, Vitaly Umanski and Eunice Lee are said to have declared that the new rules issued by the Attorney General’s Office and the Supreme People’s Court merely highlighted already illegal activities, such as maintaining a pool of capital equivalent to buyers and sellers of local yuan currencies.

Analysts at Sanford C Bernstein & Company reportedly said the biggest consequence of the revised regulations appeared to have provided “more tools for law enforcement to work together in targeted activities that were already operating outside the permitted limits.” As such, it is said to have declared that the level of enforcement of the new regulations will ultimately determine the impact on local junkets and casino customers in Macau.

“In the end, enforcement will be key to what the impact is on Macau. It is too early to say what the impact will be on Macau at this stage. If the rules are all strictly enforced and the scope of government action on all forms of money movement is deep and wide, the impact will be severe.”

Analysts at Sanford C Bernstein and the Company reportedly explained that “smaller junkets and agents” would be most severely affected if authorities implement stricter enforcement policies. In addition, they reportedly detailed that a ‘serious crackdown’ on currency transfers outside mainland China could lead to ‘under-the-table bets’ that could negatively affect VIPs’ total gaming income at more than 30 casinos in Macau.

“In a large junket, you can see that there are a number of channels where creative mechanisms always work, which are extensive enough. Another impact is further integration among junket companies to create a greater diversified capital base.” 릴게임