“Welcome to Macau, How Much Money Are You Carrying?” Casinos Face Proposed Stranglehold Regulation
Posted on: December 2, 2016, 12:24h.
Last updated on: December 2, 2016, 12:36h.
Macau casinos could suffer the most from a proposed regulation that would require incoming guests to disclose how much cash they have on them when arriving at customs in the Special Administrative Region of the People’s Republic.
Teledifusão de Macau, a leading television network in the area, is reporting that inbound travelers from international countries, as well as mainland China might soon need to tell city officials if they’re carrying more than 120,000 patacas ($15,000) upon entry. The proposed regulation would potentially have consequences for Macau’s casino revenue stream.
Chinese President Xi Jinping’s public stance is that he has had enough of the alleged corruption and Macau money laundering caused by a massive egress of wealth from his country. He’s directed law enforcement agencies to crack down on VIP touring companies, which often work in conjunction with the casinos, to prohibit the illicit flow of money out from under the federal government’s oversight.
“The report is throwing cold water on reviving sentiment for the casino industry,” Hong Kong financial analyst Ronald Wan told Bloomberg.
China Wins, Macau Loses
The financial disclosure rule being suggested by the Macau government is thought to be in response to Jinping pressure. Macau has gladly welcomed the billions of dollars moving through its city in recent years, and no industry profited more from it than the casinos.
After 12 straight years of gambling increases, total casino gaming revenue topped $45 billion in 2013. That number prompted Jinping to formally launch an attack on Macau.
Macau left Portugal in 1999 and became part of China, but under the stipulation that it would be a financial tax haven and free port, with no foreign exchange rules. VIP touring companies provided customers who purchase expensive trips to Macau with “free” money, an arrangement that is thought to have been a creative way for China’s elite to move money out from under the People’s Republic control.
China’s communist government requires that anyone making over $13,000 a year pay 45 percent of their wages to the regime.
Stocks Tumble
Financial analysts in China are mixed on the possible customs disclosures. Investors aren’t, as many are unloading their stakes in Macau casino stocks.
Sands China, Sheldon Adelson’s Macau holdings company, dropped nearly four percent on the news. Galaxy Entertainment plunged almost five percent, MGM China lost over three percent, and Wynn Macau traded 4.5 percent lower.
But not everyone is ready to walk away from Macau casinos. “Negative knee-jerk reaction on this headline would provide an even better buying opportunity for investors,” JPMorgan Chase analyst DS Kim said.
Casino resorts in Macau have slowly begun a transformation of sorts to cater to the mass market over the VIP gambler. Sands’ Parisian and Wynn’s Palace both opened recently and come with, in addition to casinos, family friendly attractions like water parks, shopping, and performance lakes that feature light shows, a la Bellagio.
So far it’s worked. Gaming revenues were up over 14 percent in November, the region’s fourth month of growth in a row.
Related News Articles
PAGCOR Auctioning Two Parcels of Land at Site of Solaire Casino
Wynn Resorts Must Face Former Shareholder Kazuo Okada in Court, Judge Rules
Most Popular
LOST VEGAS: Wynn’s $28 Million Popeye
MGM Springfield Casino Evacuated Following Weekend Blaze
Mark Wahlberg’s Latest Acting Role: Las Vegas Gym Operator
Sphere Threat Prompts Dolan to End Oak View Agreement
Most Commented
-
VEGAS MYTHS RE-BUSTED: The Final Resting Place of Whiskey Pete
October 25, 2024 — 3 Comments— -
DraftKings Upgrades Loyalty Plan, Unveils New Elite Program
October 22, 2024 — 2 Comments— -
VEGAS MYTHS RE-BUSTED: Tiger Attack Wasn’t Siegfried & Roy’s Fault
November 8, 2024 — 2 Comments—
No comments yet