Macau casinos face cash crunch

Business | Kevin Xu 21 Sep 2020

Macau casinos are facing a liquidity crunch due to a double whammy of travel restrictions and Beijing's anti-money laundering campaign, according to media reports.

In June, Beijing had identified the cross-border flow of funds for gambling as a national security risk.

Since then, financing channels used by the online gambling sector and cryptocurrency lending platforms have been cut off, with tens of thousands of suspects arrested, according to reports.

The mainland government is said to be keeping an eye on large money transfers and many bank accounts have been frozen, a source said.

Meanwhile, many deep-pocketed gamblers are in a rush to withdraw money from the casinos that offer deposit services and higher interest rates than banks, over fears of casino shutdowns.

And with the mainland government cracking down on underground banks moving money in and out of the country, casinos find it more difficult to get money from them, the report said.

Macau announced last month that tourist visas, through which most visitors enter the territory, would be reinstated for all provinces from September 23.

Gaming revenue in the casino hub plunged by 94.5 percent year-on-year in August to 1.33 billion patacas.

Five out of 23 hotels tracked by Morgan Stanley have been already fully booked for the first five days of China's October Golden Week holiday period.

However, analyst David Bain of Roth Capital Partners says general growth of visitor numbers to Macau, and a possible uptick of casino business during the Golden Week holiday period, might not be "as exciting" as some commentators are hoping.

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