A recently announced crackdown by mainland authorities on money exchange gangs in Macau, and specifically the use of cryptocurrencies for money transfer, is likely having some impact on money flow and visitation into Macau, according to Seaport Research Partners.
Seaport analyst Vitaly Umansky said in a Monday note following publication of Macau’s June GGR (gross gaming revenue) results that Macau is likely to feel some near-term headwinds as a result of the crackdown, albeit softening over time.
These headwinds, Umansky hinted, may have already been felt in June given that GGR of MOP$17.7 billion (US$2.20 billion) was below consensus.
“Macau has experienced a rise of criminal activity related to illegal money exchange over the past year,” the analyst wrote, adding that the problem “has been raised to a national level in conjunction with China authorities looking at continued use of crypto currency to move money out of China (not necessarily tied to Macau).
“We believe this crackdown round is having some negative impact on money flows into Macau and certain individuals have postponed their visits to Macau.
“The activity will likely continue to be somewhat of a headwind to GGR over the next month or two. However, we expect the crackdown to soften and liquidity in Macau to be not significantly impacted in the medium term.”
Despite concerns, Umansky said the summer outlook remains “reasonably solid” going forward, with gaming revenues expected to rise steadily from late July. GGR for July is also seen growing by 9% month-on-month to MOP$19.2 billion (US$2.39 billion).
“July is typically a solid month with base mass visitors increasing later in the month and more so in August,” said Umansky.
“With the softness in base mass, the continuation of the Euro Cup and the crackdown on money movement activity, we are more conservative on July than normal. Any major weather events in the region could have a negative impact on revenue and visitation during the summer months.
“[However] any pick up in visitation would help drive base mass GGR above our estimates. The recent crackdowns in Macau and China on money changers/money movement may have some near-term negative headwind on GGR, but we do not expect this action to be a longer-term issue.”
China’s public security authorities stated in early June that they had launched a special deployment to crack down on crimes committed by Macau-based “Money Exchange Gang Members”, with the deployment to include greater cooperation with the Macau Police.
