New regulations in Macau which aim to eradicate illicit money have had an impact on the stocks of some of the region’s key gaming firms.
The tightening of laws around illicit money includes significantly harsher sentencing for those found to be part of criminal money exchange gangs.
The new legislation comes from the Standing Committee of the Macau Legislative Assembly. The Assembly Chairman, Chan Chak Mo, underlined that as long as ‘illegal money exchange is carried out within the premises of casinos or their ancillary facilities, the law enforcement officers can regard such exchange as being carried out for the purpose of gambling’.
He also warned that the problem has intensified and the disruption to other casino players has led to increased calls for the tackling of money exchange gangs.
A Monday note saw analysts George Choi and Ryan Cheung warn that these new regulations to curb illicit money could impact the share price of gaming operators. The duo stated: “In our opinion, the news about the Macau government decision to criminalise illegal money exchange activities could bring some noise and lead to near term share price weakness.
“Although most players have their own legitimate ways to get their funds over to Macau and these small money touts are unlikely the main fund facilitator for premium mass players, we are afraid that this negative news could add uncertainties and hurt the already fragile investment sentiment against the Macau gaming sector.”
Citibank, however, did describe the situation as a unique one. The investment bank anticipates that stocks in the region will return to normal soon.
Efforts to tackle the gangs in the region pinpointed the importance of honing in on fraudulent behaviour; there had been reported success in the group’s approach as the police director emphasised a decline in the number of illegal crimes involving money exchange gangs.
Moving forward, the ministry described its approach as ‘high pressure’ as the region’s authorities seek a collaborative approach when it comes to tackling gangs and money laundering.
In one of the more specific efforts to combat illegal activity in Macau, a total of 93 people were arrested following an investigation into an illegal gambling operation in Macau, as well as Hong Kong and the Guangdong Province of mainland China.
According to a report by government officials, the operation took place across a host of major casino locations in Macau.
