• Wed
  • Jul 23, 2014
  • Updated: 5:14am
BusinessChina Business
GAMBLING

Casino shares slump after Macau crackdown on illegal handheld payment devices

Wynn Macau leads the decline in gambling stocks, with shares slumping 9.7 per cent to HK$28.10 in intra-day trading

PUBLISHED : Thursday, 08 May, 2014, 5:11pm
UPDATED : Friday, 09 May, 2014, 2:15am

Shares in Macau’s top name casino and entertainment companies slumped by as much as almost 10 per cent on Thursday, following the announcement of a crackdown on illegal money transfers in the gambling enclave.

During daytime trading, Wynn Macau led the decline in gambling stocks, with shares slumping 9.7 per cent to HK$28.10 in intra-day trading, followed by a drop of eight per cent for Galaxy Entertainment Group.

SJM Holding, Melco Crown Entertainment and MGM China also lost as much as 8 per cent, while Sands China saw stock tumble 6.6 per cent.

By the close of trading on Thursday, Galaxy entertainment had fallen 7.6 per cent, MGM China dropped 8.3 per cent, Sands China was down 4.6 per cent, Melco Crown declined 6.2 per cent, and Wynn Macau was 2.6 per cent lower.

The losses came after it emerged that tens of billions of yuan were being funnelled out of the mainland and into casinos in breach of national currency controls, thanks to the use of illegal hand-held payment devices commonly seen in and around gaming halls.

China’s state-backed payment card UnionPay last night pledged to crack down on “suspicious practices” to combat money laundering, capital flight and other illegal bank card use.

The move came days after investment bank Union Gaming Group said Macau may tighten visa rules for visitors from mainland China.

“Investors are now very jittery about all this negative press,” Grant Govertsen, a Macau-based analyst at Union Gaming Group, said.

Tourists from mainland China can legally bring 20,000 yuan into Macau and withdraw as much as 10,000 yuan a day at cash machines with each card they have.

To skirt the limits, visitors can buy goods at a pawnshop using debit cards such as UnionPay and trade them in for the local currency at the same store. Pawnshops also lend local currency to gamblers.

The use of mobile card-swiping machines to provide visiting gamblers with local currency has caused the pawnbroking business to slump by up to 40 per cent according to the Macau General Chamber of Pawnbrokers.

State-owned China Central Television reported over the weekend that Macau visitors who didn’t travel on to a third- party country could receive a special stamp on their passport, which could make future visa applications more difficult, according to Union Gaming.

“Judging from past experience, it’s often all bark and no bite,” Govertsen said. “The shortening of a visitor’s stay or the stricter use of cash cards won’t necessarily curb the gamblers’ capacity to gamble.”

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Do you mean to say that money laundering is occurring in Macau? I am shocked! Shocked!
 
 
 
 
 

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