NewMacau casino shares drop on report of crackdown on illicit money transfers

All Macau casino stocks dropped in morning trading on Wednesday, with some falling by more than 7 per cent after the South China Morning Post reported Beijing is set to launch a major crackdown on the multi-billion-dollar flow of illicit funds into the gaming hub.

The coordinated security drive will see the powerful Ministry of Public Security given electronic access to all transfers through the state-backed China UnionPay bank payment card in order to identify suspicious transactions.

See also: China launches major crackdown on flow of illicit funds to Macau

MGM China suffered the most dropping 7.30 per cent, while Galaxy Entertainment fell 7.10 per cent and SJM 5.52 per cent. Sands China dropped 4.82 per cent, Wynn Macau by 4.06 per cent and Melco Crown Entertainment was down 4.53 per cent. In comparison, the benchmark Hang Seng Index lost 0.32 per cent.

The unprecedented move - confirmed by documents seen by the Post that were sent to Macau’s banks late on Tuesday by the city’s monetary authority - turns up the heat on controversial VIP junket operators who generate the bulk of Macau gaming revenues as they come under increasing law enforcement scrutiny amid the “tigers and flies” anti-corruption drive ordered by President Xi Jinping.

In July, the Macau Monetary Authority ordered jewellery stores and pawnshops operating on casino floors to remove their UnionPay card terminals, which were a common way for gamblers to access cash.

The trigger for that campaign was a report by the Post in May that detailed concerns at the highest levels in Beijing about how the China UnionPay system in Macau was being used to conduct fake or fraudulent transactions.