Breaking News
Investing Pro 0
Extended Sale! Save on premium data with Claim 60% OFF

Macau VIP casino industry out of luck as China cracks down on capital flows

Published Aug 17, 2020 07:09PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: People walk past the headquarters building of Luso International Banking Ltd. in Macau
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio

By Farah Master

HONG KONG (Reuters) - China's move to stamp out online gambling to help contain capital outflows is hitting liquidity in Macau's VIP segment, at a time when the world’s No. 1 gambling hub is hobbled by slowing economic growth, Sino-U.S. tensions and coronavirus lockdowns. 

In June, Beijing 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.

Authorities have frozen thousands of bank accounts and seized more than 229 billion yuan ($32.95 billion), according to government statements, while illegal gambling rings across the country have been purged on a near weekly basis.

Casino executives and junket operators in Macau, a special administrative region where casino gambling is legal, say the crackdown is hitting big spending VIP customers due to worries over their financing channels via the junkets.

“It definitely impacts liquidity,” said Lam Kai Kuong, director of the Macau Junket Association, adding the VIP industry may never return to revenue levels hit two years ago unless China stops its suppression of VIP gambling.

Gambling is illegal on the mainland and junkets operate in a grey area, luring big spending gamblers with luxury perks and lines of credit, often using underground banking networks and payment channels.

The VIP junket sector in the former Portuguese colony accounts for almost 50% of overall revenues, which hit $36.5 billion last year. 

While many top junkets are not directly involved in online gambling, agents under them use these channels to settle debts and provide credit for high rollers.

"The junket sector in Macau has been living on borrowed time for years, and the end is drawing nearer," says Anthony Lawrance, managing director of Greater Bay Insight, a consultancy.

"China clearly intends to cut out these middlemen and gain better control over the outflows of renminbi (yuan) through Macau.”


Macau junket executives said while China was not targeting the Macau casino industry itself, the focus on money laundering and illegal transactions put pressure on liquidity.

The crackdown prompted some speculation that Asia’s top junket operator, Suncity, had been targeted by authorities last month.

The speculation saw around 900 players withdraw deposits from Suncity’s VIP clubs across casinos in Macau between July 9-11, according to an internal email sent among operators.

Macau’s police and gaming regulator were advised of the withdrawals, the notice said, while photographs on Wechat showed dozens of investors lining up outside Macau’s luxury parlours to withdraw cash amid fears it would be seized by authorities.

Following the withdrawals, Suncity’s Chairman Alvin Chau spoke in rare detail about the company’s financials in a seven minute online video, denying the company had been targeted and saying it had enough cash to cover bad debts and deposits for its customers.

Macau’s gaming regulator told Reuters last week it was paying close attention to the matter although so far it had not seen any “irregularities” concerning Suncity’s business. 

Separately, in a notice to customers and reviewed by Reuters, junket AG Asia Entertainment, which targets Chinese gamblers via online operations in the Philippines, said it was ceasing operations and asked them to withdraw deposits before Aug. 12.

The crackdown comes as casinos struggle with a dearth of travellers due to coronavirus restrictions.

China has announced the resumption of Macau tourist visas for nationals from Sept. 23.

Ben Lee, founder of Macau gaming consultancy IGamiX said even if there was demand from high rollers to come to Macau, the ability of the junkets to finance gaming activity remains severely constrained and would put further onus on casino operators. 

“The only way for the VIP segment to recover is for the casinos to expand their lines of credit without corresponding cash collateral (from the junkets) which has been a prerequisite for them in the past.”  ($1 = 6.9501 Chinese yuan renminbi)

Macau VIP casino industry out of luck as China cracks down on capital flows

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email