Macau watchdogs will double down on digital yuan

January 3, 2022 Crime & Legal

China will gamble on the digital yuan. As Macau’s casino owners prepare to bid for new licenses in the city for the first time in two decades, regulators will be sure to use the opportunity to squeeze more out of them in 2022. Expect them to force operators in the offshore gaming hub to become test beds for the digital yuan.

As current concessions for the $37 billion market expire, companies like Sands China (1928.HK) and Wynn Macau (1128.HK) will be eager to prove themselves team players. Regulators are already flexing their muscles. A government consultation paper on the rebidding process pitched ideas like appointing government agents to supervise daily operations.
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The average high roller lost over $27,000 on each visit to the tables in Macau, Bernstein analysts estimate. It has been a haunt of corrupt officials and businessmen too. In December, junket operator Suncity’s boss Alvin Chan was implicated in an investigation into illegal gaming. Suncity facilitated bets for wealthy VIPs, a market segment worth around $8 billion in gaming revenue the year before Covid-19 struck. Just one month earlier, central bank governor Yi Gang suggested China’s newly developed cryptocurrency could be useful for fighting crime and resolving complex cross-border payments problems, including money-laundering read more . Macau might have been on his mind.

Migrating the gaming hub to digital payments would complement Beijing’s desire for greater oversight of cash flows and customers. Situated outside Chinese capital controls, Macau is also an ideal place to test the technology before rolling it out more widely on the mainland. Others are already considering the concept of cashless casinos using traceable funds. Australia’s Star Entertainment (SGR.AX), for example, says it is exploring digital payments to assuage its watchdogs.