Macau casinos to be handed card scam deadline

Macau bosses will be told to stop use of illegal China UnionPay devices or face a crackdown that could also involve shops on gaming floor

PUBLISHED : Tuesday, 13 May, 2014, 11:44pm
UPDATED : Wednesday, 14 May, 2014, 11:30am

Macau casinos will be handed a deadline by which to get rid of illegal China UnionPay mobile swipe card devices or face a crackdown on the city's multimillion-dollar illegal cash-transfer business, gaming insiders say.

The news comes a week after it emerged that tighter curbs on China's only payment card being used to circumvent national currency controls were on the way.

People with knowledge of the planned squeeze have told the South China Morning Post that a deadline of July 1 will be set by Macau's Monetary Authority.

It is understood that discussions are also under way that could see the crackdown apply to shops on or around casino floors with officially registered fixed swipe card devices.

It is known that these shops sell goods which can quickly be returned for cash in what is a form of currency transaction.

Informed analysts believe the business could have involved as much as 40 billion yuan (HK$50.3 billion) last year.

The crackdown will be backed by Beijing, which controls state-owned China UnionPay. The past week's developments - which rattled normally high-performing casino stocks - come amid speculation over possible moves by Beijing to restrict visas for Macau as the anti-corruption campaign of President Xi Jinping continues.

Macau attracted about 29 million tourists last year.

Mainland visitors can legally take 20,000 yuan into Macau and withdraw as much as 10,000 yuan a day at cash machines with each card they possess.

Last night, in response to questions about the deadline from the Post, the Monetary Authority of Macau said that UnionPay had been restricting the use of its cards in the gaming industry "since its inception".

While not confirming the July 1 deadline, the statement added: "During the course of on-going supervision of card acquiring services by banks, the monetary authority may, in accordance with any changes in and development of the market, streamline or strengthen relevant risk management and on-going customers' due diligence, with the objective of promoting healthy development of the sector."

China UnionPay referred the Post to the Monetary Authority statement. News of a deadline comes as reports in Macau quoted SJM Holdings chief executive Ambrose So Shu-fai as saying that tighter controls by China UnionPay and the Macau authorities could have an impact on casino revenues.

Mobile UnionPay payment devices from the mainland have illegally entered Macau at a rapid rate and are being used for unauthorised dealings that appear as domestic transactions, circumventing currency controls.

The mobile swipe devices are also used to evade tax on the mainland, which is why they require authorisation for use there.

Macau police have carried out a handful of raids in and around casinos in recent months and seized devices and cash.

But the problem had reached dimensions that the central government could no longer ignore, said a gaming analyst.

Last week, the Macau General Chamber of Pawnbrokers said the illicit trade had caused their business to slump by 40 per cent.

None of the major casinos contacted for comment on the latest developments had responded by press time.