Crackdown on illicit money exchangers helps to explain Macau GGR summer downturn.

Crackdown on illicit money exchangers helps to explain Macau GGR summer downturn.

 Slower visitor demand, a crackdown on illegal money transfers, and an uncertain Chinese economy are projected to cause Macau's casino sector to miss revenue estimates for the month.
 GGR fall in Macau
 The casino sector in Macau might not generate the expected July income.  The city's casinos should bring MOP18.5 billion (€2.1bn/£1.73 billion) in gross gaming revenue (GGR) according to JPMorgan analysts.  That would be little below the MOP19 billion projection.

 June likewise did not live up to expectations.  Macau GGR dropped short of the median expert projection of 17.5%, but rising 16.4% over 2023.  It stayed likewise 25.7% below pre-Covid levels.

 Mid-summer decline is to be expected in Macau.  Chinese visitors swarm for the spring Golden Week holiday in May.  Usually, the rise is followed in Macau GGR by what Citigroup refers to as a "seasonal trough."

 Crackdown on financial transactions is a consideration.
 Another element is in play this year: the government's fresh campaign on illicit money exchanges. Started in June, the campaign aimed to stop loan sharking and capital flight.  It also serves to prevent Chinese visitors from carrying more mainland money than allowed across the border on each trip.

 Chen Shiqu of China's public security ministry has claimed that "money exchange gangs" hiding around casinos unlawfully give players "a large amount of Hong Kong dollars, in cash."  At the casinos in the city, HKD is the coin of the realm.

 City analysts claimed that worries about illicit money changers are exaggerated.

 "Most players... have their own legitimate ways to get their funds over to Macau, sufficient for them to bet as much as HK$1 million (€117,700)", George Choi and Ryan Cheung wrote.

 Ben Lee, managing partner of IGamiX Management and Consulting, said in comments to GGRAsia: "With the casinos themselves offering currency exchange at their cages, one must wonder why there is demand for illegal money changers, unless they are not really changing money."

 Premium players and celebrities will feel the strain.
 Lee said that a significant issue of the Beijing administration is actually "transferring money across the border," which the touts actually do. Of gamblers, he said, VIP and premium players are most likely to suffer from the clampdown.  "The sums those players gamble are much more than the limitations they are allowed to bring across the border.  Also affected will be some of the grind mass, especially those requiring money above the daily ATM limit.

 Mass-market players are more likely to feel the pain, according to Hoffman Ma, executive director of Success Universe Group Ltd., Hong Kong-based.

 "The kind of gaming patrons most affected are not likely to be those of high net worth, or who come frequently to Macau, as those kinds of players usually have their own funding channels," he said to the news source.

 And any more review of financial transactions "will result in short-term drops in our gaming revenue," Lee said.