China's next leaders might curb Macau's fortunes
Associated Press
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Updated 4:52 p.m., Monday, November 5, 2012
Macau's casino industry has mushroomed over the past decade after its government eased restrictions, drawing a flood of mainland Chinese visitors that have helped supercharge the economy, created tens of thousands of well-paying jobs and made vast fortunes for a few U.S. gambling kingpins. China holds a once-a-decade Communist Party congress starting Thursday that will usher in new leaders who might already be uneasy about Chinese citizens spiriting wealth outside the mainland to Macau in violation of capital controls, as well as the huge profits being made there by U.S. casino companies. "The primary risk to the gaming sector, I believe, comes from the Chinese side, and it will come from the end of acquiescence to this vast capital control abuse and a crackdown on corruption," said Steve Vickers, a former head of intelligence at Hong Kong's police force who is now chief executive of business intelligence and risk consultancy SVA. In one case earlier this year, a vice president at state-owned Agricultural Bank of China was detained in an investigation that financial magazine Caixin said was related to allegations the bank lent money to a property developer to help the executive cover 3 billion yuan ($476 million) in gambling debts. Junkets act as middlemen, helping mainland Chinese travel to Macau, lending them money in the form of chips and then collecting on debts once they return home. In a report released in March, the U.S. State Department said junkets are "increasingly popular among gamblers seeking inscrutability and alternatives to China's currency movement restrictions." Vickers said that UnionPay, China's payment processing system, has lowered the daily limit for transactions to 1 million yuan ($160,000) from 5 million yuan ($801,000) — a sign that officials are already trying to stem the flow of illicit money. Macau lawmaker Jose Coutinho holds out the faint hope that if Obama wins, he'll pressure U.S. casino companies operating in Macau to be fairer to workers by paying them extra for working shifts and overnight. Reported by SeattlePI.com 1 hour ago.
Associated Press
Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Updated 4:52 p.m., Monday, November 5, 2012
Macau's casino industry has mushroomed over the past decade after its government eased restrictions, drawing a flood of mainland Chinese visitors that have helped supercharge the economy, created tens of thousands of well-paying jobs and made vast fortunes for a few U.S. gambling kingpins. China holds a once-a-decade Communist Party congress starting Thursday that will usher in new leaders who might already be uneasy about Chinese citizens spiriting wealth outside the mainland to Macau in violation of capital controls, as well as the huge profits being made there by U.S. casino companies. "The primary risk to the gaming sector, I believe, comes from the Chinese side, and it will come from the end of acquiescence to this vast capital control abuse and a crackdown on corruption," said Steve Vickers, a former head of intelligence at Hong Kong's police force who is now chief executive of business intelligence and risk consultancy SVA. In one case earlier this year, a vice president at state-owned Agricultural Bank of China was detained in an investigation that financial magazine Caixin said was related to allegations the bank lent money to a property developer to help the executive cover 3 billion yuan ($476 million) in gambling debts. Junkets act as middlemen, helping mainland Chinese travel to Macau, lending them money in the form of chips and then collecting on debts once they return home. In a report released in March, the U.S. State Department said junkets are "increasingly popular among gamblers seeking inscrutability and alternatives to China's currency movement restrictions." Vickers said that UnionPay, China's payment processing system, has lowered the daily limit for transactions to 1 million yuan ($160,000) from 5 million yuan ($801,000) — a sign that officials are already trying to stem the flow of illicit money. Macau lawmaker Jose Coutinho holds out the faint hope that if Obama wins, he'll pressure U.S. casino companies operating in Macau to be fairer to workers by paying them extra for working shifts and overnight. Reported by SeattlePI.com 1 hour ago.