Beijing calls for crackdown on illegal money exchanges in Macau

Beijing is intensifying efforts to curb illegal money exchange activities in Macau’s casino industry, as part of a broader initiative to combat illegal gambling and money laundering.

According to a report in the People’s Daily, China’s Ministry of Public Security convened a high-level meeting last week to coordinate a nationwide crackdown on these illicit operations.

The move is part of a wider plan to tackle illegal activities such as underground gambling, money laundering, loan sharking, and scams that have led to “fights, fraud, thefts, illegal immigration and other crimes,” according to a post on the ministry’s website.

Authorities report that unauthorized currency exchanges and loan sharks have been rapidly expanding in Macau, often connected to other criminal activities like violence, scams, and smuggling that are “seriously affecting social stability” in the city.

The planned response includes strengthened border controls, better coordination to apprehend fugitives, and deeper investigations to trace the sources and dismantle the “entire industry chain” of these criminal syndicates. Closer cooperation with Macau’s police force is also on the agenda.

Beijing has long targeted illegal gambling, money laundering, and underground banking in Macau, the only place in China where casino gambling is legal. The latest moves come as the city’s gaming revenues reached their highest levels since the Covid-19 outbreak, boosted by the easing of travel restrictions for mainland Chinese tourists.

Secretary for Security, Wong Sio Chak, also stated in a report last week “the substantial increase in the number of tourists, while accelerating the recovery of the gaming industry, will inevitably lead to an increase in relevant illicit activities, especially illegal money exchange activities that have become more intense.”

“People who engage in the illegal exchange of money, commonly known as ‘money exchange scammers,’ have been disrupting the security environment of casinos and peripheral areas for a long time, and are responsible for several serious crimes.”

Macau has seen a sharp rise in crimes related to illegal money exchanges, with 8,124 people intercepted in the first half of 2023 – nearly triple the figure from a year earlier when pandemic controls were still in place, according to the city’s security office.

Additionally, local police intercepted a cross-border fraud syndicate and arrested over 110 people, seizing more than 30,000 exchange coupons. This involved at least 70 local cases worth over HKD18 million.

Peng Peng, the executive chairman of the Guangdong Society of Reform, said the fact that the problem had been raised to a national level showed that it is seen as a risk to China’s overall financial security and also aligned with President Xi Jinping’s corruption crackdown.

“In order to protect China’s financial security, [we must] tackle the problem of corruption and prevent the illegal outflow of money, the government sees a need to hinder the illegal industry of money exchange,” Peng said. Howard Tong