Modernizing the gambling hub
In the future, Macau law could require gamblers to pay for casino chips with a virtual currency. According to the jurisdiction’s chief executive (CE) Ho Iat Seng, the government is mulling plans which would see the implementation of a digital yuan.
The executive spoke with lawmakers while presenting at the Legislative Assembly on Tuesday. During the meeting, he said that Macau’s government will work with China’s central bank to “study the feasibility of issuing a digital currency.”
a virtual currency will help the region combat money laundering and tax evasion
Ho Iat Seng argued that a virtual currency will help the region combat money laundering and tax evasion. He also noted the increased prevalence of digital funds in gambling markets across the globe. Several cities in mainland China have already introduced digital yuan, but Macau has not yet published any formal implementation plans.
The news comes as Macau casinos continue their slow recovery following the COVID-19 outbreak. Since March last year, restrictions to travel and declining VIP business led to overall low gambling revenue figures, which are only starting to rebound this quarter.
Bad news for casino junkets
As reported by Bloomberg News, some junket operators have expressed opposition to the chief executive’s plans. They warned that a government-controlled virtual currency could spell the end for Macau’s gambling industry, already hampered by the pandemic crisis.
the ability to purchase casino chips through digital yuan would eliminate the need for intermediaries
Meanwhile, analysts have yet to fully evaluate the impact a virtual currency might have. In a recent note, Sanford C. Bernstein analysts predicted that going virtual could wipe out Macau’s junket operators. They argued that the ability to purchase casino chips through digital yuan would eliminate the need for intermediaries.
While this might prove detrimental to the industry in the short term, Bernstein analysts believe casinos will ultimately benefit from easier access to money. This is particularly true for Macau’s mass market, which has become increasingly dominant over the past year. In Q4 2020, mass-market share accounted for 75% of gross gaming revenue.
COVID-19 test discussions underway
Ho Iat Seng also announced on Tuesday that Macau is in discussions with mainland China regarding the easing of some pandemic restrictions for visiting gamblers. The government intends to remove a negative virus test requirement for any visitors, as long as they have received both of their COVID-19 vaccinations.
individuals could earn an exemption from tests if they receive two doses of the vaccine and produce antibodies after 14 days
“We are discussing with the mainland government to reach mutual recognition of COVID-19 vaccines, at least with Guangdong Province,” Ho Iat Seng explained. He said individuals could earn an exemption from tests if they receive two doses of the vaccine and produce antibodies after 14 days.
The executive also revealed that Beijing is yet to make a decision regarding the resumption of electronic Individual Visit Scheme applications. Mainland China suspended the process in January 2020, resulting in a substantial decline in Macau visitors last year. This added to the casinos’ woes as gross gaming revenue dropped to $7.53bn for 2020, down 79%.