Food
After a deadly pandemic wiped out most revenue for the year, Macau’s gaming industry could face a permanent structural shift with the potential introduction of a new system to exchange digital yuan for gambling chips.
Macau’s watchdog, the Gaming Inspection and Coordination Bureau, has been in talks with various casino operators over the usage a digital yuan to buy casino chips, according to a report citing unnamed sources.
The discussions are still in the initial stages and no final decision has yet to be made.
Currently, tourists entering Macau to gamble commonly use two methods to obtain casino chips. One method is to obtain chips by converting Hong Kong dollars (which is widely accepted in the fellow special administrative region). Another is to obtain credit often from junket providers, a method commonly used by mainland high rollers to sidestep Chinese capital control rules.
By introducing the digital yuan and enforcing it as the medium to exchange casino chips, authorities risk disrupting Hong Kong dollar flows and, more importantly, putting junkets out of business.
In addition to hurting service providers in the middle, imposing a digital yuan would significantly increase the transparency of money flows from the mainland to Macau.
Industry watchers are concerned not only about the lack of privacy for gamblers but also the potential of a conversion cap to expand the coverage of mainland China’s capital control rules.
Although some believe the introduction of the move could boost Chinese middle-class participation in Macau’s gambling sector through the ease of conversion, others expect a fallout in the casino hub due to its strong reliance on high rollers that need financial flexibility.
The report added that the increased exposure to casinos in Russia and the Philippines by Suncity Group, the listed arm of Macau’s biggest junket operator and the recent mystery buyer of cigar brands like Cohiba, was a response to changes such as the potential implementation of the digital yuan, citing another unnamed source.
Gaming revenue in Macau has plunged by $27 billion this year, down at least 90 percent for six straight months since March.
