Neither the recent announcement of a new currency declaration protocol for passengers arriving or departing Macau, nor a crackdown on the use of non-KYC ATMs by Chinese Union Pay card holders has had any negative impact on the city’s revenue, according to financial services firm Credit Suisse.
In a Friday note, the company estimated VIP volume through the first half of July to be up by around 45% year-on-year and between 10 and 15% sequentially. That’s despite the incoming currency declaration protocol, due to take effect from 1 November, which prompted leading Macau junket operator Suncity Group to send a message to its vendors and clients earlier in the month warning of the risks of carrying large sums of cash. The “Control of Cross-Boundary Transport of Currency and Bearer Negotiable Instruments (CBNIs)” law will require travelers carrying cash or monetary instruments worth MOP$120,000 or more to submit a declaration form to customs.
Macau’s banks have also been ordered to replace old ATMs with new machines fitted with Know Your Customer technology, while holders of mainland China Union Pay cards will no longer be able to withdraw funds from older style ATMs.
“Our on the ground check indicates solid momentum (July GGR tracking +25-28%) with limited operational impact,” said Credit Suisse analysts Kenneth Fong and Lok Kan Chan.
“Suncity’s rolling volume post its SMS alert was actually up 3 to 5% week-on-week compared with the prior two weeks. This suggests the cases could be isolated and apparently no widespread crackdown.
“Overall, its July VIP rolling volume is now up 10 to 15% month-on-month or ~45% year-on-year. As 60% of the Macau VIP business is cash based (i.e. players need to bring cash to Macau to play instead of credits), a solid volume means no difficulty for money transfer.
“Our discussion with junket agents/pawn shop and premium mass hosts, money flow has been smooth and they haven’t notice additional scrutiny. Also, no delay in players’ agents’ repayments after the incident.”
Credit Suisse puts average daily mass market revenue up 8 to 10% month-on-month with “no impact from the new KYC ATM.”
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