GGRAsia – New AML rules help Macau casinos, junkets: EY

New AML rules help Macau casinos, junkets: EY

Oct 21, 2016 Newsdesk Latest News, Macau, Top of the deck

Multinational accounting and audit services firm Ernst and Young LLP, also known as EY, expressed optimism regarding the anti-money laundering rules targeted at Macau casinos and junket operators. The consultancy firm said it believed that the compliance requirements would support the gaming industry’s healthy development in the long term.

The comments were made by Manhim Yu, a partner with the fraud investigation and dispute services at EY, in a press briefing held in Hong Kong on Thursday. He was commenting on the revised anti-money laundering rules for Macau’s gaming sector, enacted in May.

Following the increasing scrutiny of the operations of junket groups, the banking sector is now showing more openness to negotiate financing opportunities and other credit arrangements with junket operators, said Mr Yu, as quoted by Chinese media in Hong Kong.

The revised anti-money laundering rules for Macau’s gaming industry states additional requirements regarding transaction reports and compliance rules, said Mr Yu. He added that the need to register key personnel in charge of junket operations has also helped raise the transparency in the city’s junket industry.

The rules oblige casino and junket operators to “identify and closely monitor transactions” involving “politically exposed persons”, including from mainland China. For that, operators must have in place an “adequate” risk management system that allows them to identify politically exposed persons.

Whether or not to accept business from a “politically exposed person” is a decision that can only be made by an executive-level member of a casino or junket operator, the new rules state.

Additionally, the revised rules introduce two whole new chapters of rules regarding, respectively, the extension of credit to gamblers and transfer of funds. Among other provisions, the new instruction states a daily record must be kept of all credit operations conducted for gambling purposes, and of the parties involved.

The new rules have however kept the threshold set for casinos to report “large” transactions at MOP500,000 (US$62,500).

Speaking to Hong Kong media, EY’s Mr Yu said the new rules have forced casino operators and junkets to upgrade their respective data systems and recruit more compliance personnel, who have to be poached from banks or insurance firms from outside Macau.

These measures would add pressure to casino operators and junkets in the short term, but will be beneficial for the healthy development of the sector in the long run, Mr Yu was quoted as saying.