About one trillion of “people’s money” flows out of China every year
For years, the Chinese government has been trying to quell the enormous flow of gambling funds that some of its wealthy citizens lose to casino operators overseas. At first the flow was to Las Vegas, and for the past decade Macao has been the major recipient of funds, considered illegal by the Chinese government, taken out of China.
Now, the Chinese Standing Committee of the National People’s Congress has decided that the only way to stop such funds is to establish in criminal law any such action that supports the export of local funds for gambling purposes, and “will conduct a second review on an amendment to the country’s criminal law, proposing a new crime definition for overseas gambling operations aimed at luring Chinese citizens,” reported news agency China News Service.
Last month Liao Jinrong, Director General of the Ministry of Public Security International Cooperation Department, stated that some about one trillion Renminbi (RMB), otherwise known as “people’s money” in funds flows out of China into gambling activities every year. This is about US$145.5 billion that goes mostly to US based casinos, with Donald Trump’s pal Sheldon Adelson, major shareholder of Las Vegas Sands, as the main beneficiaries, although of late, other countries in the region are targeting Chinese players to boost revenue.
For years now, some of the harder Chinese authorities have considered the export of such funds as, “posing a threat to the country’s economy and national security., and in June, the Chinese Central Bank and top monetary authority, People’s Bank of China, also issued a statement asking China’s Central Government to combat cross-border gambling-related financial chains, and engage in this “major political mission.“
In August, the country’s Ministry of Culture and Tourism announced that it would establish a “blacklist” of cross-border gambling tourism destinations, which will restrict Chinese citizens’ travel to overseas cities and scenic spots on the list. Although the list does not include Macao or Las Vegas, it includes Southeast Asian countries that have in recent years targeted Chinese gamblers through land-based or online gaming operations, such as the Philippines, Vietnam, Cambodia, as well as Australia.
Tightening of financial regulations would be directed at the usual financing channels used by VIP players via junkets operators, including Macao, which would impact further the local gaming sector, already hurting from the reduced visitor numbers caused by the Covid-19 pandemic. Macao gross gaming revenues have dropped by 82.5 per cent year-on-year to some US$4.8 billion, between January and September.
