Casinos’ need for junkets or agents could be significantly curtailed with a more direct relationship with players
The acceleration of the use of the digital Yuan as a valid currency in Mainland China could be a potential “game-changer” for Macau by overhauling entire payment systems.
According to the Macau Gaming Research Association’s 2021 Macau Gaming Service Index report, the renminbi (RMB), the official currency of China, could become legal tender in Macau: “Customers can buy chips instantly using RMB without the need to convert to HKD by then. The need for junkets/agents will be significantly curtailed and casino operators can develop a more direct relationship (with players).”
The annual survey is organised by the Macau Gaming Research Association – MGRA, in collaboration with SGS Hong Kong Ltd, described as an inspection, verification, testing and certification company. Chinese authorities have been testing the use of the world’s first state-backed cryptocurrency, issued and managed by the country’s central bank, the People’s Bank of China.
Real-world trials for digital currency have already been initiated in a number of mainland cities, including Shenzhen, Chengdu and Suzhou The new currency would allow Chinese policymakers greater visibility into how money flows in and out of the country’s economy, with gaming analysts having previously noted it could impact the volume of VIP gaming volume in the Macau SAR.
A MGRA sampler argues that as the focus shifts from VIP to mass market, service levels at mass casino floors will have a greater effect on the competitiveness of concessionaires. The group’s survey of casino resort staff performance shows that there was a 17-point improvement year-on-year in the overall index in the fourth quarter of 2020, relative to the final three months of 2019.
MGRA collected 728 data samples from Cotai resorts and 520 from Macau peninsula properties and visited mass-market customer areas of 15 gaming properties, and in its latest report provides an overview of the local gaming market and its estimates for the evolution of the sector, stating for example, that mass-market areas are showing more “commercial value” and generating more revenue than VIP areas.
“China continues to combat cross-border gambling and restrict the outflow of funds at present, which will continue to cripple junkets and or agents’ abilities to bring premier customers to VIP rooms – foreign or otherwise,” the report states.
Macao Gaming revenues plunged by 79.3 per cent year-on-year in 2020 to some MOP60.4 billion (US$7.5 billion), as the Covid-19 pandemic led to a sharp reduction in the number of customers. Mass market play represented about 65 per cent of all gross revenue from games of fortune in the city for the last three months of 2020, with VIP baccarat accounting for 35 per cent, one of the lowest percentages of VIP results in recent years.
Meanwhile, while local gaming authorities continue to strengthen anti-money laundering controls in the junket sector, new criminal law amendments on cross-border gaming promotion operations enforced by Chinese authorities this month have also compounded the woes of the already severally impacted local VIP market in recent years.
An amendment to China’s criminal law enforced on March 1 determining anyone who ‘organises’ mainland Chinese for the purpose of ‘overseas’ gambling will be deemed to have committed a criminal act.
Analysts have considered that the changes target mainly gaming operations in the Philippines, Cambodia, Myanmar, Laos, Vietnam, as well as Australia, and the wording of the new amendment’s establishes that cope of action to gambling “outside the country (borders)”, may have the possibility of expanding to Macau gambling operations, also.
