Xi Jinping urges Macau to rein in casinos as Beijing looks to stem the flow of illicit funds through the city

President tells new government to exert more control over the industry as Beijing looks to stem the flow of illicit funds through the city

PUBLISHED : Sunday, 21 December, 2014, 3:56am
UPDATED : Sunday, 21 December, 2014, 3:56am

President Xi Jinping has urged Macau to put its gambling house in order by exerting greater control over the casino industry which has turned the city into the world's biggest gaming location.

As the former Portuguese enclave marked the 15th anniversary of its return to Chinese sovereignty yesterday, Xi called on the Macau government to find "greater courage and wisdom" to "strengthen and improve regulation and supervision over the gaming industry".

The call heaps pressure on the new administration of Macau Chief Executive Fernando Chui Sai-on to come up with concrete plans to reshape an economic model that sees casino-related taxes make up more than 85 per cent of government revenue.

Chui responded last night by saying his government would "undertake a review" of the casino industry in spring next year.

The president's comments follow a turbulent few weeks for the city's gaming industry which has seen revenues slump and casino share prices plummet as the twin effects of the mainland's anti-corruption drive and economic slowdown bite.

It is also the latest and clearest sign yet that Beijing is serious about stemming the capital flight problem it has with the casinos.

Last week the South China Morning Post reported that China is to launch a major crackdown on the multibillion-dollar flow of illicit funds through the casinos in a coordinated security drive that will see the country's powerful Ministry of Public Security play a leading role.

The unprecedented move - confirmed by documents seen by the Post that were sent to Macau's banks last week by the city's monetary authority - also turns up the heat on controversial VIP junket operators who bring in the high-rolling gamblers who generate the bulk of revenues.

The security drive will give the ministry's Economic Crimes Investigation Bureau electronic access to all transfers through the state-backed China UnionPay bank payment card system to identify suspicious transactions.

The bureau is spearheading the "Fox Hunt" operation aimed at securing the return of corrupt officials who have fled overseas and funnelled millions worth of illicit funds out of the country.

The VIP junkets are coming under increasing law enforcement scrutiny in China, Hong Kong and overseas amid Xi's "tigers and flies" anti-graft drive.

Xi was speaking after swearing in Chui's new ruling team for his second term at the East Asian Games Dome.

A casino insider, speaking on condition of anonymity, suggested that comments in the same speech by Xi about resisting "foreign interference" may have been aimed at certain casino operators, as well as being a push for the government to up its game on economic diversification.

"There are people who have angered Beijing over the way certain developments have been handled. The comments can't be a coincidence," the source said.