China has announced a three-month crackdown on its so-called underground banking system in what will be another obstacle for small junket operators who rely on the informal source of funding.
The move is seen as part of the effort to prevent capital from leaving the country after the recent depreciation of the yuan. In a separate move, Macau police have raided five locations seizing Union Pay machines that were rigged to make it appear that customers were taking money from the machines in mainland China rather than Macau.
Kenneth Fong of Credit Suisse dismissed the importance of the raids, noting that they were against machines, not people withdrawing money.
However, Jamie Soo of Daiwa said that cracking down on Union Pay withdrawals hurts because they are a source of funds for premium mass-market players. China allows only $3,000 a day to be taken out of the country.
Vitaly Umansky of Bernstein expects the move to create short-term issues for Macau’s VIP business and continue to push the consolidation of junket operators.
Source: Fantini’s Gaming Report
