Illegal money exchanges on chopping block in Macau?
Macau has introduced significant criminal penalties for illegal currency exchanges, integrating this measure into its “Law to Combat Gambling Crimes.” The proposed amendment, to be reviewed in the upcoming legislative session, mandates prison terms for offenders of up to five years.
On Friday, government officials from Macau announced a crucial amendment to existing legislation criminalizing illicit money exchanges within the city’s casinos. Legislative Assembly Chairman Chan Chak Mo confirmed that lawmakers will vote on the bill before the end of the year.
This proposed amendment, which is included in the draft “Law to Combat Gambling Crimes,” stipulates prison terms of up to five years for offenders, alongside a ban from entering city casinos for a duration of 2 to 10 years. Notably, there are currently no penalties imposed on casino-goers who utilize these unauthorized exchanges.
The existence of illegal money exchanges predominantly enables gamblers from mainland China to bypass Beijing’s stringent controls on capital flight and cross-border gambling activities.
Government Crackdown Initiated in June
In June, Macau’s Ministry of Public Security initiated a crackdown on illegal money exchanges, initially without criminal sanctions. The ministry linked these illicit operations to a spectrum of serious crimes, including fraud, theft, money laundering, loan sharking, and even offenses such as kidnapping and murder.
Coincidentally or not, the announcement of this amendment came on August 9, mere days after the murder of a man associated with money exchange operations. The victim was found in his Cotai hotel room on August 7, the result of multiple stab wounds to the head and neck.
Local reports indicate that the victim had been working within a money-exchange network since the beginning of the year, notably winning approximately HK$2.5 million (£251,000/€293,500/$321,000) just before his demise.
Two suspects have been arrested in connection with the case, identified as a mainland Chinese man and a Hong Kong woman, both of whom were reportedly involved in these illicit exchanges.
Financial Repercussions
Industry analysts suggest that the government’s stringent approach toward illegal money exchanges has contributed to a marked decline in gaming revenue during June and July.
Following the announcement of the proposed amendment, Macau casino stocks experienced a downturn. According to a Bloomberg Intelligence index, shares of Galaxy Entertainment Group Ltd fell by as much as 5.7%, while Sands China Ltd shares dropped as much as 5.2%.
Citigroup analysts noted, “This negative news could introduce uncertainties and adversely impact the already fragile investment sentiment surrounding Macau’s gaming sector.”
Officials assert that these criminal activities have “seriously affected social stability” in Macau, the sole region in China where gambling is legal. They have pledged to disrupt the “entire industry chain” through targeted interventions, which will include increased border checks.
As of May, approximately 1,900 unauthorized money changers were apprehended during police operations and subsequently denied entry to Macau. Of this figure, 927 individuals have been reported to the Gaming Inspection and Coordination Bureau (DICJ) and banned from over 30 casinos within the region.
In the same five-month timeframe, it was reported that 30 Macanese individuals participated in these illegal activities.
