Date
20 September 2017
Macau regulators are cracking down on illicit use of UnionPay cards by people from mainland China. Photo: Bloomberg
Macau regulators are cracking down on illicit use of UnionPay cards by people from mainland China. Photo: Bloomberg

Casino stocks slide amid UnionPay crackdown

Casino operators took a big hit on the stock market Tuesday after SJM Holdings (00880.HK) chief executive confirmed that Macau’s monetary watchdog has ordered the removal of all UnionPay kiosks from casino premises.

The move is said to be aimed at preventing bank card abuse and illegal transactions that violate China’s national currency controls.

SJM shares slid 5.2 percent to HK$19.2 (US$2.48), while Sands China (01928.HK) dropped 2 percent to HK$51.85 and Galaxy Entertainment (00027.HK) fell 1.5 percent to HK$55.95. The sector’s performance was in contrast to gains in the broader market, which saw the benchmark Hang Seng Index rise 198 points to close at 23,315 points. 

Rumors have been flying thick in recent weeks that UnionPay, China’s state-backed domestic bank card organization, is stepping up efforts to crack down on illegal payments. It was reported that some bettors have circumvented currency controls by using their UnionPay bank cards.

The Monetary Authority in Macau has ordered jewelry stores and pawnshops located inside the casinos to stop using all UnionPay kiosks before July 1, TVB reported on Tuesday, citing Ambrose So, chief executive of SJM, the city’s biggest gambling company by market share.

“We do not know how many gamblers use this means to get cash… but we believe it will have some impact on the gambling industry,” So said.

Industry watchers are worried that the regulatory action will further tighten liquidity in the world’s largest gambling hub that had four straight months of decline in revenue growth.

Curbs on UnionPay kiosks would make accessing cash less convenient for casino patrons who would then be required to access cash in locations that are either away from casino floors or outside of casinos, Macau-based analyst Grant Govertsen at Union Gaming Group said in a report earlier.

 – Contact the writer at [email protected]

JH/JP/RC

EJ Insight reporter

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