Macau officials say the possible introduction of currency importation controls isn’t intended to put the brakes on the special administrative region’s casino business. Speaking at the 2nd Beijing Macau Co-operation and Exchange Projects Promotion Seminar on Wednesday, Secretary for Economy and Finance Tam Pak Yuen said the proposal to require visitors to Macau to declare the amount of cash they’re carrying was “not targeting the gaming industry” and was not “a limitation on the movement of cash at all.”
Tam said that Macau’s status as a member of the World Trade Organization meant it had to abide by “many aspects and international responsibilities,” but he insisted there had been as yet no decision made on whether such a declaration system would be necessary, nor whether a threshold would be established under which such declaration would be required. Tam said even if such a system was deemed necessary, there would be no restrictions imposed so long as the cash in question was “not related to money laundering,” although he declined to offer specifics on how that distinction would be made.
It’s possibly significant that Macau would be citing WTO commitments as justification behind its consideration of currency declaration requirements, given the fact that the US State Department has long sought to link Macau with money laundering, and US gaming regulators and politicians were publicly associating Macau’s casinos with organized crime just last month. However, should Macau be considering this step in order to please US authorities, someone should really point out that the US has never really put all that much effort into abiding by its own WTO commitments.
While some industry observers have suggested a declaration requirement would put more of a crimp into the cash-only mass-market gaming segment than on the credit-reliant VIP business, Hong Kong-listed junket operator stocks dipped the day after news of the declaration hit the media. Then again, investors may be more worried over signals that credit is tightening on the Chinese mainland. JP Morgan analyst Kenneth Fong issued a note saying previous instances of credit tightening have taken one to two months to negatively impact Macau VIP gambling figures, and that as a result, investors will be keeping a sharp eye on trends in VIP demand. “Until there is clarity … we believe the sector will consolidate.”
