“money changers”

 ju24

Some mainland China players may have put off visiting Macau in June amid publicity about a crackdown by the Chinese authorities on unlicensed cross-border money exchange, says a Monday note from Seaport Global Securities LLC.

“We believe this crackdown round is having some negative impact on money flows into Macau and certain individuals have postponed their visits to Macau,” stated analyst Vitaly Umansky.

The authorities’ activity “will likely continue to be somewhat of a headwind to GGR [gross gaming revenue] over the next month or two,” he wrote.

But Mr Umansky added: “We expect the crackdown to soften and liquidity in Macau to be not significantly impacted in the medium term.”

June GGR might also have been negatively affected by the Euro 2024 international soccer tournament in Germany running from June 14 to July 14. Macau in June typically had modest play volumes anyway, said Mr Umansky.

https://www.ggrasia.com/some-players-avoiding-macau-amid-cash-crackdown-analyst/

A recente repressão das autoridades do Interior da China contra grupos de câmbio ilegal de dinheiro em Macau e, especificamente, o uso de criptomoedas para transferência de verbas, estará a ter algum impacto no fluxo de dinheiro e nas visitas a Macau. Por outras palavras, alguns jogadores do Continente poderão ter adiado a visita a Macau em Julho, devido aos anúncios das autoridades, segundo a Seaport Global Securities LLC. Para Julho, as perspectivas são mais modestas que o habitual.

“Acreditamos que esta ronda de repressão está a ter um impacto negativo nos fluxos de dinheiro para Macau e que alguns indivíduos adiaram as suas visitas a Macau”, afirmou o analista Vitaly Umansky.

A actividade das autoridades “vai provavelmente continuar a ser um pouco um obstáculo para [as receitas brutas do jogo] durante os próximos meses”, escreveu, para depois acrescentar: “Esperamos que a repressão abrande e que a liquidez em Macau não sofra um impacto significativo a médio prazo”.

https://jtm.com.mo/local/repressao-aos-cambistas-ilegais-afecta-receitas-dos-casinos/

 jun24

China’s Ministry of Public Security has urged security forces in Macau and the mainland to strengthen cooperation in cracking down on illegal money exchange businesses in the Macau SAR, Xinhua News Agency reported on Monday.

The so-called ‘money changers’, present around the city’s casinos, have been identified as a key method for moving funds across different jurisdictions, particularly between the mainland and Macau.

Driven by huge profits, the scale of the “money exchange gangs” providing large amounts of cash exchange and high-interest loan services illegally in Macau has expanded rapidly, mainland authorities said, adding that this has triggered other illegal activities such as fighting, fraud, theft, and smuggling, severely affecting local social order and stability.

https://www.macaubusiness.com/public-security-ministry-calls-for-crackdown-on-illegal-money-exchange-in-macau/

Beijing’s planned clampdown on unauthorised money changing in Macau, reported by mainland China media on Monday, “isn’t the first time that authorities have vowed to crack down on similar activities in Macau,” said a Tuesday note from JP Morgan Securities (Asia Pacific) Ltd.

The South China Morning Post said on Monday, citing the Chinese state outlet People’s Daily, that Beijing wanted to interrupt what was termed the “entire industry chain” relating to such illicit exchange of currency in Macau.

It was described as a further step to tackling what was termed illegal gambling, as well as money laundering.

The report said a national-level planning meeting of officials was held to discuss the matter by the Ministry of Public Security in Beijing last week.

https://www.ggrasia.com/beijings-macau-money-swap-crackdown-no-surprise-jpm/

may24

Unauthorised money changers, including ones that loiter in or near Macau’s casino premises, have become increasingly “corporatised and professional” in their activities, with that trend “evident” in the post-Covid-19 period. So said Macau’s Secretary for Security, Wong Sio Chak, in a Tuesday briefing on the city’s first-quarter crime trends.

He didn’t give specifics. The first-quarter gaming crime trend report compiled by Mr Wong’s office, however, highlighted: “The police have also come to notice that, post the Covid 19 pandemic, a small number of illicit money exchange gangs have also started to engage in illicit lending activities.” That was understood to be a reference to loan sharking, known as usury in the Macau legal system.

The city’s top security official stated that the activities of unauthorised money changes had “long been disturbing” the security environment of the city’s casinos and their surroundings. Their activities were often linked to “serious crimes”, particularly fraud, he asserted.

Macau police probed 149 frauds in the first quarter said to be linked to unauthorised money change activity. In 124 cases, the unlicensed traders were allegedly the “crime-doers”, said the first-quarter crime statistics report. Tactics included use of fraudulent bank notes, or promises of money remittance that turned out to be bogus.

The report did not clarify whether the 149 frauds were all or mostly linked to funds for casino gambling. Nonetheless the trend was up relative to the 112 frauds tied to money changing in the first quarter last year, and the 107 such fraud cases in pre-pandemic first quarter 2019.

https://www.ggrasia.com/money-touts-now-organised-threat-to-macau-casinos-wong/

jan24  LOBO VILELA

The presence of illegal so-called “money changers” in and around Macau’s casinos has become a significant issue, impossible to ignore.

These “money changers” have devised an intricate and sophisticated scheme to move funds across different jurisdictions without crossing any border. The system, which involves exchanging Hong Kong dollars (made available in Macau) for the renminbi (handed over in China) in consideration of a commission, is currently the primary unofficial channel for providing funds to gamblers in Macau.

This activity replicates what is known as the “Vancouver Model,” created to circumvent restrictions imposed on capital outflow from certain countries, including China. According to a 2021 report by the Asian Racing Federation, cross-border illegal betting is causing a staggering CNY$1 trillion (USD$145 billion) to flow out of China to offshore websites and casinos every year.

Recent reports on crime in Macau have highlighted a notable increase in the number of “money changers.” This surge can be attributed to the lift of COVID-19-related travel restrictions, which has led to an (expected) increase in gamblers. Additionally, traditional mechanisms for making funds available to patrons have been failing, such as the putative “purchases” in pawnshops, affected by the annual limit of CNY$100,000 (USD$14,500) imposed by China’s State Administration of Foreign Exchange on overseas withdrawals from bank accounts in China. Also, the “domestic” purchases illegally made via UnionPay mobile POS terminals located in Macau and connected to servers in China are more strictly controlled.

However, the primary cause of this exponential increase in “money changers” is the – natural – need to fill the void left by the “disappearance” of casino gaming promoters. Before the pandemic, the casino gaming promotion activity was valued at around USD$17 billion in 2019 and moved an estimated USD$ 600 billion per year (or USD$1.14 million per minute).

The concern of local authorities has been growing over the last few years, and the release of the “Public Prosecutor’s Work Report for 2019” has only added to their worries. The report states that there is no “effective solution for combating such activities” and urges the “public services responsible for justice matters” to study how to strengthen “through legislative initiative, the regulation of such activities and even their possible criminalisation, to find a balance between upholding the freedom to exchange money and combating illegal profitable exchange.”

It is a legitimate concern given the rise in crime statistics in Macau, particularly the crime associated with the type of activity carried out by the “money changers” (money laundering, fraud, counterfeit gaming chips, passing counterfeit currency, loan sharking and in some cases, murder) and the fact that almost all of them are non-Macau residents. All this poses a potential threat to public safety and – not least – to the image of the Macau SAR as a “world centre for tourism and leisure” and beyond.

The recent amendment to the Gaming Law, in line with the amendment to the Criminal Law of the PRC, reflects this concern. Greater emphasis has been placed on the objective of ensuring that casino operations are carried out free from criminal influence by expressly adding the need for compatibility with the Macau SAR’s policies and mechanisms aimed at preventing money laundering and terrorism.

The concern is also echoed in the recent discussion around the possible ban on gaming promoters extending credit for casino gaming.

The Macau authorities have conducted several “scientific studies” since 2019. The results so far suggest that while the activity should not be penalised criminally (and therefore has no place in the law proposal to repeal the Illicit Gambling Law to be presented to the Legislative Assembly), it can be administratively within the framework of the financial system (whose primary law was approved in August last year and made no provision for it). The studies also seem to highlight the tremendous challenge of ending with the “money changers” plague (certainly worse than the bedbugs (allegedly) “coming from Europe” that are plaguing Macau).

This is a complex topic because of the disadvantages that the absence of “money changers” entails, especially for the “six large integrated tourism and leisure companies.“

However, some measures within spitting distance – intuitive, not creative – can be implemented to mitigate the proliferation of “money changers” or at least moderate the volumes involved. One effective measure would be to restrict the cash transaction amounts allowed (one of the first measures to curb the “Vancouver Model” was prohibiting cash transactions in British Columbia casinos). Another one is to make identification compulsory when entering casinos, as in other jurisdictions like Singapore. Combining this latter measure with customer/player loyalty programmes and the facial recognition functionality made possible by surveillance systems installed in casinos would help maintain the regular and orderly flow of entries while banning and effectively preventing those operating outside the legal limits from re-entering casinos. Where there’s a will, there’s a way!^

https://www.macaubusiness.com/opinion-wild-card/