Casino operator Las Vegas Sands’ policy of allowing Chinese gamblers to use their UnionPay bank cards to purchase casino chips at its Singapore resort Marina Bay Sands reportedly has Beijing bankers plotting revenge.
Earlier this month, the South China Morning Post reported that Marina Bay Sands was running a ‘resort entertainment’ voucher program that allowed China UnionPay cardholders to purchase gambling chips, in apparent violation of card policy.
Informed of Sands’ chip purchasing program, Xie Zhong, payment settlement director of the People’s Bank of China, told the SCMP that UnionPay cards “should certainly not be used in casinos.” The Singapore Casino Regulatory Authority declined multiple requests for comment on Sands’ policy.
Las Vegas Sands’ corporate spokesman Ron Reese defended its policy, saying the voucher program “was designed to give guests flexibility in purchasing a variety of goods and services.” Reese further claimed that the voucher program operates “in accordance with the terms and conditions of China UnionPay cards.”
China UnionPay announced new restrictions on the use of its bank cards this month, apparently in response to Beijing’s growing concerns over a sharp increase in capital flowing out of China. The announcement sent Macau casino operator stock prices tumbling, until Macau officials clarified that the restrictions weren’t an onerous as originally reported.
China’s foreign exchange reserves have shrunk by one-quarter since 2014, falling to $3.05t as of November 2016. Declines in the value of the Chinese yuan has forced Beijing to spend big in order to prop up its currency, and the concern is that further spending of this type will accelerate the yuan’s decline. The spending allowed Japan to usurp China as America’s biggest creditor for the first time in six years.
China’s central bank also tightened its control over co-branded credit cards that permitted customers to make transactions in dual currencies. As of November, all expiring Visa or MasterCards must be replaced with China UnionPay cards.
