New Macau Law Targets Illegal Currency Exchanges for Gambling
In a long-awaited move, Macau revised its Laws on Committing Gambling Crimes legislation to plug further holes that saw billions of Yuan leave China in capital flight every year.
Macau Cracks Down on Yuan Capital Flight. ? Bernd ?? Dittrich, Unsplash
Macau Cracks Down On Illegal Money Exchanges
Macau’s increases in crime related to illegal money gangs facilitated money laundering schemes and extortive loans. Finally, this forced the hand of the Special Administrative Region of Macau, with additional pressure from the Chinese government in Beijing.
Chinese authorities have long advocated for changes as the Yuan was changed to Hong Kong Dollars. Then, it changed to US dollars in the casinos and backrooms of Macau before vanishing overseas. However, the criminal gangs providing loans and cash transfers help fund Macau’s continued growth.
They enable a massive part of its higher-end business, as current Chinese law only allows the equivalent of about 50k US per citizen to leave the country each year. Their complex loans and currency exchange products allow higher-end gamblers access to far greater funds.
All Macau casino companies’ stock prices saw sharp downward movement in the days ahead of the new bill’s passage. For the first time, the new law offers criminal charges for corporate entities that help facilitate illegal gaming. Some gaming analysts predicted Macau GGR would shrink 2% from first estimates for 2024.
Currency Exchange Inside Macau Casinos Deemed Illegal
In another first, the new law effectively shuts down all currency exchanges inside casinos, as it deems such practices tied to illegal gaming unless conducted by a licensed party. These currency exchanges and the illegal loans taken out in Hong Kong Dollars in Macau were paid back with a transfer of Yuan between bank accounts inside mainland China. There, the 50k transfer limit does not exist, and such transactions have long been the primary way to launder money and avoid Chinese capital controls.
Criminals now face up to five years in prison for illegal money exchanges or up to eight years for loan sharking. The law also now allows for the use of undercover agents to help root out these common practices, as well as new laws that only allow those arrested to communicate with their lawyer and no one else. This has been made to prevent them from tipping off others being investigated.
Macau Lottery Games Also Locked Down
While most of these new laws were expected, the Macau government also chose to crack down on Lotteries. While it has long been understood that most of these lotteries were grey market affairs that weren’t quite legal, the Macau authorities had long turned a blind eye. Many mom-and-pop stores depended on lotteries to help pay the bills.
One of the most popular of these is the Mark Six Game, operated by the Hong Kong Jockey Club, which has been around for almost fifty years and predates legal gambling in Macau by decades. But despite repeated attempts by some local lawmakers to exempt it and other lottery games like it, vendors selling these lottery tickets now face up to two years in jail.
New Macau laws on gambling will change the city ? Constantine S, Unsplash
Other parts of the law make side betting and parallel betting illegal. These activities either involve betting on the outcome of a casino game between individuals without involving the casino or, in the case of parallel betting, involve cameras worn inside the casino to determine the outcomes of legal, licensed games. That is then used in illegal casinos, either off-premise or, in most cases, for online gambling.
