Taking on premium mass
Concern about “capital outflows” from Mainland China has prompted the government to set new limits on UnionPay cash withdrawals outside the country. The limits are effective immediately, reports Asia Gaming Brief.
According to Bernstein Research, the lower annual limit is RMB100,000 ($US15,700) per card for 2016 and RMB50,000 for the rest of 2015. Daily withdrawal limits remain at RMB10,000 per card. Any new accounts that surpass these limits will be added to a watch list; SAFE has already ordered banks to monitor accounts that make frequent cross-border transfers.
The new measures are likely to take a bite out of the premium-mass gaming market, wrote Bernstein analyst Vitaly Umansky in a note to investors. “Most Premium Mass customers utilize UnionPay cards (among other means) to access cash for play in Macau casinos,” Umansky said. “While many customers have multiple UnionPay cards, larger Premium Mass customers may find their access to cash more limited as a result of the new limits.”
UBS Securities Asia Ltd. says it anticipates “no material direct impact” on the Macau casino industry, reported GGRAsia, particularly as “withdrawing cash from ATMs is not a major source of cash for most gamblers.” UBS estimated “at least 30 percent” of Mainland mass-market players get their gambling money by buying goods through UnionPay at pawn shops, then immediately returning the merchandise for cash refunds.
That roundabout method is legal, wrote the Sanford Bernstein team, but cautioned, “There is risk that Chinese authorities may pressure Macau into creating tighter regulations around pawn shops.”
