ATM withdrawals in Macau top HK$10 billion a month, as authorities ensure machines never run dry, source says
But surge has sparked concerns over money laundering and capital flight
The total amount of cash withdrawn from ATM machines in Macau has topped an “eye-watering” HK$10 billion a month as the world’s No 1 gambling hub basks in what appears to be a casino revenue renaissance after several years of negative numbers.
The hole-in-the-wall cash flood has prompted monetary chiefs in the former Portuguese enclave to order banks to make sure the city’s 1,300 cash dispensing machines never run dry.
However, ahead of a high-profile visit to the city next Monday by top Chinese leader Zhang Dejiang – during which Beijing’s top man on Hong Kong and Macau affairs is expected to make an “important announcement” – concerns have emerged that money laundering and capital flight could be a significant factor in the ATM withdrawal surge.
The Monetary Authority of Macau would neither confirm nor deny the HK$10 billion-a-month figure. But a source with knowledge of the situation told the South China Morning Post: “The amounts are eye-watering – HK$10 billion-a-month is a conservative estimate. The banks have been told to make sure every ATM is monitored on a 24-7 basis so as soon as cash levels get low, a team is ready to fill the machine back up, on a 24-7 basis.”
Macau’s gambling revenue rose for the ninth straight month in April. Shares in casino firms have rallied strongly, with the top three Hong Kong-listed stocks – Sands China, Wynn Macau and Galaxy Entertainment – adding HK$20 billion in market value.
In December last year, monetary chiefs slashed in half – from 10,000 patacas to 5,000 patacas – the amount that could be withdrawn from an ATM in a single transaction, but this appeared not to have eased the pressure on the special administrative region’s red-hot cashpoints.
One factor behind the phenomenon could be illustrated by two prosecutions in the People’s Court of Changshan County in Zhejiang province last year which heard evidence of people using hundreds of cards linked to multiple accounts to withdraw cash in Hong Kong dollars from ATMs in Macau.
In January last year, the court heard evidence that one couple used 402 cash card accounts to make withdrawals from Macau ATMs as part of a 105 million yuan (HK$118 million) illegal foreign exchange racket.
In a similar case in the same court last October, evidence showed that 222 cash card accounts were used by a gang to make ATM withdrawals in the casino hub as part of a 139 million yuan foreign exchange scam.
The Monetary Authority of Macau did not answer when asked if it had ordered all banks to put in place systems that operated around the clock, seven days a week to ensure that ATMs never run out of banknotes. It instead referred to a press release issued earlier this year during the Lunar New Year holiday rush.
“Relevant measures were implemented for the second time during [Lunar] New Year to facilitate the spending of Macau residents during the long holidays. These measures have been implemented ... and they are much welcomed by the residents,” a spokesman said.
“With the aim of strengthening cooperation among government departments and financial institutions in Macau and the mainland, a joint meeting was hosted by the monetary authority and co-organised by the Financial Intelligence Office of Macau in November 2014.
“The exchange of views focused on cross-border criminal activities related to the use of mainland bank cards and POS (point of service) machines in Macau,” he added.
But a financial services consultant, who asked not to be named, said: “I wonder why the monetary authority thinks it is so important to keep the taps open so this flood can come out, rather than focusing on stemming it?
“Perhaps this could be one of the reasons Zhang Dejiang is coming down – to have a look for himself at what the hole in China’s financial security net looks like.”
According to an annual study carried out by the International Monetary Fund, the number of ATMs in Macau has more than quadrupled since the gaming industry was liberalised in 2001.
Between 2010 and 2015, the ATM count per 100,000 adults in Macau grew from 139 to 254, while in Hong Kong the same figures were 46 and 49 respectively.
The huge increase in cash dispensing machines in Macau becomes even more spectacular when comparing the 56 ATMs the city had for 100,000 adults in 2004 with the 254 per 100,000 it had in 2015.
Besides dwarfing Hong Kong’s figure, the number is also three times the rate on the mainland, which has 76 ATMs per 100,000 adults, up from just nine in 2006.