If Macau employs China’s central bank-backed cryptocurrency for gaming transactions in the future, it would pose a threat to the city’s junkets, JP Morgan Securities (Asia Pacific) said in its notice last week.
This transactional change would “dramatically reduce the need for junkets,” which are businesses that act as middlemen for high rollers from the mainland, GGRAsia cited the brokerage saying.
The brokerage’s forecast came a day after Bloomberg stated in a report that it heard from people “familiar with the matter” that Macau’s casino operators were approached by the Gaming Inspection and Coordination Bureau (DICJ) to study the possibility of digital yuan.
On the same day the report was issued, the DICJ denied in a statement that it had talks with gaming operators on the feasibility of utilizing digital yuan to buy casino chips in the city’s casinos.
Once it is implemented, the new policy will limit the amount of money a mainland player can carry on every trip to Macau to 50,000 Chinese yuan (US$7,648), JP Morgan said.
“Since gamblers would be able to use e-renminbi from his/her e-wallet to purchase chips, casinos wouldn’t have much, if any, reason to pay hefty commissions to junkets – currently approximately 44% of VIP gross gaming revenue,” the brokerage said, shedding light on why a digital currency would undermine the city’s junkets.
Following the official statement denying this, the brokerage stressed that “we don’t think investors should make anything of this news, at least for now” as it is “highly unlikely in the foreseeable future” that the digital yuan would be introduced to the city. Staff Reporter
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