Friday’s news that Macau is to criminalise the unlicensed changing of money within a casino setting for the purposes of gambling, “could bring some noise and lead to near-term share price weakness” among Macau’s casino operators, says a note from Citigroup.
The provision against money changing has been added to the latest draft of the ‘Law to Combat Gambling Crimes’. It also covers unlicensed money changing in non-gaming areas of casino properties.
There will be a penalty of up to five years’ imprisonment for those found guilty.
Citigroup analysts George Choi and Ryan Cheung stated: “In our opinion, the news about the Macau government’s decision to criminalise [unauthorised] money exchange activities could bring some noise and lead to near-term share price weakness.”
The institution further noted: “Although most players have their own legitimate ways to get their funds over to Macau – and these small money touts are unlikely [to be] the main fund facilitator for premium mass players – we are afraid that this negative news could add uncertainties and hurt the already fragile investment sentiment against the Macau gaming sector.”
Nonetheless Citigroup added that the latest visitor trends for the city’s tourism market “continue to show that Macau remains one of the top outbound travel destinations for mainland Chinese.”
The daily average of visitors to Macau rose by about 22 percent in the first seven days of August, relative to the daily average in July, according to data from Macao Government Tourism Office issued on Thursday. The latest daily average was 120,000 versus 98,000 across July.
The freshly-drafted Article 11 of the draft Law to Combat Gambling Crimes is headed “Operation of Illicit Currency Exchange for Gambling”, said on Friday Chan Chak Mo, a veteran legislator who heads a Legislative Assembly committee tasked with scrutinising the bill.
According to Mr Chan, the new article states that “those that have not obtained an authorisation to operate currency exchange business in order to serve a gambling purpose, may receive a penalty of up to five years in prison”.
It adds that the “operation of currency exchange made in casinos is presumed to be granted for gambling, meaning that, for this purpose, it is understood to cover all premises specifically intended for the exploitation of games of fortune or chance, as well as other adjacent premises where activities of an artistic, cultural, recreational and commercial nature are carried out, or linked to the hotel industry.”
Mr Chan said on Friday that the amended bill was likely to receive its second and final reading at a plenary session of the city’s Legislative Assembly in the next legislative term, i.e., before the end of the calendar year, though he noted no specific date had yet been set.