The crackdown on illegal money exchange will have a limited impact on the city’s gaming, as the issue is not new. However, “there will obviously be a Balloon Effect,” according to investment bank JP Morgan. The institution noted that illicit currency exchanges on or around casino floors only target a very specific and niche cohort of players. Therefore, the “impact should be relatively limited – our best guess is less than 10% of total GGR is using these ‘services’ at most.”
The investment bank argued that while stock prices may reflect a negative knee-jerk reaction today, many investors are likely to feel this is “nothing really new at this stage, and that the stock reactions could be somewhat modest and short lived.”
“Macau authorities have been stepping up efforts to clamp down on these money exchangers since mid-last year and, to us, this seems to be an extension of such initiatives, as most of the illegal operators are from mainland China,” the analysts added.
China’s Ministry of Public Security has urged security forces in Macau and the mainland to strengthen their cooperation in cracking down on illegal money exchange businesses operating in Macau.
However, this is not the first time that authorities have vowed to crack down on similar activities in Macau.
Authorities in Macau have previously taken action against illegal UnionPay POS machines and underground banks in the Greater Bay area.
Efforts to combat illegal money exchangers have intensified since last year, with many operators coming from mainland China.
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