China’s State Administration for Foreign Exchange – also known as SAFE – has reportedly announced new annual limits on automated teller machine (ATM) cash withdrawals made outside mainland China using the China UnionPay Ltd electronic transfer system. The news was given by Chinese media outlets.
According to the reports, with effect from January 1, 2016, each UnionPay-enabled card will have a new, annual, cash withdrawal limit at overseas ATMs of RMB100,000 (US$15,714). Prior to that, with effect from October 1, 2015 until December 31, 2015 there will be a RMB50,000-per-card ATM cash withdrawal limit, it was additionally reported.
These limits are on top of the existing policy which sets daily withdrawal limits at RMB10,000 per card.
UBS Securities Asia Ltd said in a note issued on Tuesday that it expected “no material direct impact” on the Macau gambling market, as “withdrawing cash from ATMs is not a major source of cash for most gamblers”.
“This is due to the existing daily [ATM] limit…, [the] high transaction fee, and the existence of other methods to obtain cash for gambling in Macau,” wrote analysts Anthony Wong and Angus Chan.
But they added the measures reportedly announced by the mainland authorities were likely to cause “sentiment overhang” among Chinese consumers on UnionPay card use in general.
The institution estimated “at least 30 percent” of mainland mass-market players’ cash for gambling in Macau comes from purchasing goods through UnionPay at pawnshops and then immediately returning the goods for a cash refund.
The UBS analysts noted: “There is currently no mention of any new measures on the usage of UnionPay cards to purchase goods [or] for consumption overseas.”
Brokerage Sanford C. Bernstein Ltd in Hong Kong said in a note on Tuesday: “The new policy is an indication that China is concerned about capital outflow.”
“The new policy is an incremental headwind to Macau GGR [gross gaming revenue], in particular premium mass,” wrote the institution’s analysts Vitaly Umansky, Simon Zhang and Bo Wen, referring to a segment of players valuable to the casino operators, and that place cash bets at minimums significantly above the ‘grind mass’ players.
“Most premium mass customers utilise UnionPay cards (among other means) to access cash for play in Macau casinos. While many customers have multiple UnionPay cards, larger premium mass customers may find their access to cash more limited as a result of the new limits,” the brokerage added.
Referring to the purchase refund system used by some Macau players to get access to cash, the Sanford Bernstein team stated: “The pawnshop transactions are legal in Macau and occur through approximately 200 shops. However, there is risk that Chinese authorities may pressure Macau into creating tighter regulations around pawnshops.”
Aug 16, 2018Food and drink have been heavily marketed as part of Macau...
Jun 27, 2018Macau’s gaming law needs to be amended in order to...
Jun 25, 2018Electronic casino game distributor Asia Pioneer...
Sep 18, 2018The Macau government has yet to consider whether to make it compulsory for local casinos to suspend operations when Typhoon Signal No.8 or above is hoisted by the local weather bureau. So said on...
”Given that the blanket casino closure [in Macau due to Typhoon Mangkhut] happened on an all-important weekend day… we expect that somewhere between MOP1.1 billion [US$136.2 million] and MOP1.5 billion in GGR will be lost”
Analyst at Union Gaming Securities Asia