Dec 15, 2015 Newsdesk Latest News, Macau, Top of the deck  
The “long-held common practice” in Macau of gamblers using local watch and jewellery shops to access cash via China UnionPay Co Ltd bankcards “may be at risk”, says a note from Karen Tang of Deutsche Bank AG.
The analyst’s commentary followed news on Friday that the Monetary Authority of Macao would implement a real time monitoring system for payments made via UnionPay.
“We believe, unlike previous attempts, Macau is now more serious in tackling the… common practice where jewellery and pawnshops use UnionPay on the official Macau banking network to disguise cash withdrawals as purchases,” wrote Ms Tang.
“According to a few jewellery shop owners we spoke to, they have not been informed of these new changes. Near term, they prefer to stay cautious and plan to reduce the number of large amount transactions to avoid getting the attention from the banks,” added the analyst in her Sunday note.
Deutsche Bank estimates such transactions often involve the release to the customer of between HKD100,000 (US$12,903) and HKD500,000 in cash, and fund 10 percent to 15 percent of all cash accessed by gamblers in Macau: possibly accounting for as much as 30 percent of so-called premium mass (high stakes cash play) and 10 percent of VIP play.
Mainland visitors are only allowed to take a daily limit of RMB20,000 (US$3,109) out of China in cash, but gamblers are said to get around this by purchasing items from one of Macau’s pawnshops or jewellery stores using UnionPay and then returning the goods for a cash refund.
Gaming industry analysts have previously said such activity had until now been tolerated by the authorities.
Exposure risk
Referring to the market risk of a real-time monitoring scheme being applied to Macau pawnshop transactions, Ms Tang stated: “If implemented, we think Melco Crown Entertainment Ltd and MGM China [Holdings Ltd] (high premium mass exposure) and Galaxy [Entertainment Group Ltd] and Wynn Macau [Ltd] (high VIP exposure) would be hurt most with a 5 percent to 7 percent EBITDA [earnings before interest, taxation, depreciation and amortisation] impact.”
Ms Tang added: “We disagree with consensus view of a mild GGR [gross gaming revenue] recovery in 2016. We forecast GGR to fall 7 percent in 2016.”
Were the new real-time monitoring system to be enforced rigorously, Daiwa Securities Group Inc thinks it will “further dampen the possibility of seeing growth in mass GGR next year”.
“In our view, this new development warrants a more cautious view on the sector in 2016. We believe there is now an even higher risk of downward consensus GGR/earnings revisions in the near future,” stated Daiwa analysts Jamie Soo, Adrian Chan and Jennifer Wu in a note on Monday.
The institution’s existing forecast for mass market Macau GGR in 2016 is a year-on-year decline of 3 percent, versus what it says is a market consensus of 10 percent year-on-year expansion of mass GGR.
Japanese brokerage Nomura said in a note on Tuesday: “In our view, Macau (especially VIP gaming) is not out of the woods yet, as we expect it to experience three consecutive years of falling GGR (3 percent in 2014, 35 percent in 2015 Forecast and 8 percent in 2016 Forecast).”
Last week, it was reported UnionPay had issued a memo ordering a clampdown on illegally modified point of sale (POS) units used to swipe UnionPay cards. Some of the adulterated units were allegedly rigged to show transactions as occurring on the mainland rather than Macau and therefore being liable to lower fees.
In September, mainland Chinese media reported that China’s State Administration for Foreign Exchange – also known as SAFE – announced new annual limits on automated teller machine (ATM) cash withdrawals made outside mainland China using UnionPay-enabled bank cards.
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. Prior to that, with effect from October 1, 2015 until December 31, 2015 there is a RMB50,000-per-card ATM cash withdrawal limit, it was additionally reported.
Feb 23, 2023
Nov 12, 2021
Jun 02, 2023
Jun 02, 2023
Jun 02, 2023
Genting Singapore Ltd says Lam Yi Young has resigned from his role as deputy chief executive of Resorts World at Sentosa Pte Ltd. The latter firm is an indirect wholly owned subsidiary of Genting...Jun 01, 2023
Alfastreet, a manufacturer of electronic gaming machines,...Jun 01, 2023
Casino equipment maker Sega Sammy Creation Inc is tweaking...Jun 01, 2023
The iGaming segment in Asia “has grown rapidly” since...May 31, 2023
Showing slot machine players – via animations on the...May 31, 2023
Macau stocks in likelihood “have been punished too much...May 31, 2023
There are foreign companies still interested in investing...May 31, 2023
Thailand could pass the necessary enabling legislation for...May 30, 2023
China will remain a key market for Asian gaming...May 30, 2023
Alejandro Tengco (pictured in a file photo), chairman and...May 30, 2023
There are “plenty of reasons” for the global gaming...May 30, 2023
Gaming equipment provider International Game Technology Plc...May 30, 2023
The Global Gaming Expo (G2E) Asia 2023 Special Edition:...May 29, 2023
Austria-based gaming equipment maker and operator Novomatic...May 25, 2023
Sports betting and online casino operating platform...May 24, 2023
The business performance in Asia of gaming content and...May 18, 2023
The organisers of Global Gaming Expo (G2E) Asia 2023...May 17, 2023
Gaming content and equipment supplier Light & Wonder...May 16, 2023
Casino equipment maker Sega Sammy Creation Inc is to...May 09, 2023
Casino slot machine and digital gaming content provider...May 05, 2023
The Global Gaming Expo (G2E) Asia event in Singapore is the...May 04, 2023
An adviser to a Thailand parliamentary committee mulling...(Click here for more)
US$8.1 billion
Macau’s casino gross gaming revenue in the five months to May 31