State-run banks implicated in multibillion-dollar cash-for-gambling racket in Macau

Documents detailing how UnionPay is used in Macau casinos to evade currency controls raise questions about the involvement of large banks

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China UnionPay is investigating the problem of handheld swipe-card devices being used in Macau to provide cardholders with access to cash for gambling.

Published: 5:15am, 4 Jun 2014Updated: 7:43am, 4 Jun 2014

A multibillion-dollar cash-for-gambling racket in Macau casinos that subverts China's strict currency controls is being run by a sophisticated cross-border syndicate within the state-run banking system.

As pressure mounts on Macau to crack down on the scam - which insiders say involved more than 40 billion yuan (HK$50.23 billion) in illegal cross-border transactions last year - the South China Morning Post has seen documents that explain how the China UnionPay network is used in a complex process that poses serious questions about the involvement of state-run banks.

Last month, the Post reported that China UnionPay was investigating the problem of handheld swipe-card devices being used in Macau to provide cardholders with access to cash for gambling. The racket has alarmed Beijing and hit casino stocks.

The documents show how the mobile devices are used to show cash transfers - normally disguised as the purchase of a designer watch or jewellery - as having taken place on the mainland by 99Bill.com a third-party processing company.

According to banking industry sources, once 99Bill.com clears the transaction and authorises the remittance of funds from mainland bank accounts, it then authorises the remittance of these payments to the Macau bank accounts of the shops involved in the transaction.

The sources say lax due diligence checks have seen these cross-border payments accepted into accounts of at least two state-run banks with operations in the former Portuguese enclave.

Despite repeated attempts, 99Bill.com did not respond to questions from the Post.

State-run banks implicated in multibillion-dollar cash-for-gambling racket in Macau

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Documents detailing how UnionPay is used in Macau casinos to evade currency controls raise questions about the involvement of large banks

Documents detailing how UnionPay is used in Macau casinos to evade currency controls raise questions about the involvement of large banks