The value of transactions using unregistered China UnionPay Co Ltd terminals in Macau amounted to MOP300 million (US$37.6 million) in the first eight months of 2014, Portuguese news agency Lusa reports, citing Macau police sources.
Lusa quotes the city’s Judiciary Police as saying they have identified 51 suspects – 39 from mainland China and 12 from Macau – involved in what they describe as illegal transactions. They have investigated 40 cases since the beginning of the year, with 34 of the cases sent to the territory’s Public Prosecutions Office.
According to Macau authorities, traders legitimately using the China UnionPay system for transactions in the city must pay the parties involved a maximum fee of 1.4 percent of the amount of the transaction. UnionPay International Co Ltd, a subsidiary focusing on transactions outside the borders of the People’s Republic of China, including the Special Administrative Regions of Macau and Hong Kong, receives 0.2 percent of that fee.
UnionPay International missed out on MOP600,000 in transaction fees for deals allegedly done on unregistered terminals in Macau between January and August, the police told Lusa.
UnionPay sales in Macau totalled US$22.5 billion last year, according to media reports.
Macau authorities and China UnionPay were reportedly cracking down on the use of transactions in Macau via via unauthorised terminals. GGRAsia understands that in some cases the transactions via the unauthorised terminals show up as being completed within the border of the People’s Republic of China, thus circumventing the mainland’s cross-border currency controls.
Mainland visitors are only allowed to take a daily limit of RMB20,000 (US$3,211) out of mainland China in cash. Gamblers however routinely get around this by purchasing items from one of Macau’s pawnshops or jewellery stores using their UnionPay cards, immediately returning it in exchange for cash – a transaction that is not illegal.
Authorities in the city are cracking down on the use of unregistered, hand held card swipe devices. According to the police, the illegal transactions using these devices took place not only at casinos, but also “in restaurants and other establishments” close to gaming venues, Lusa reports.
Jewellery and watch shops inside the precincts of the city’s casinos have been banned from applying for new UnionPay swipe terminals since July 1. The existing swipe card devices operated by such shops have not been removed but the Macau government has not excluded that possibility.
Concerns over disruption to the UnionPay system in Macau have been pointed out by investment analysts as headwinds for the mass-market segment of casino gambling.
Casino gross gaming revenue has dropped for four consecutive months, driven by a sharp decline in VIP revenue. But analysts have also warned of a slowdown in mass revenue, forecasting flat growth for the mass market in October.
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