China is expanding its “blacklist” of overseas gambling destinations that will be off-limits to its citizens.
State-run news agency Xinhua cited the Ministry of Culture and Tourism as saying “relevant departments,” the ministries of Foreign Affairs and Public Security among them, were compiling a “second batch of overseas destinations that attract Chinese tourists for gambling activities, which will be subsequently added to the system.”
The aim, the ministry said when the list was first announced in October, is “to better regulate the tourism market and safeguard the lives and property of Chinese citizens.”
As with initial official mentions of the ban, the latest announcement didn’t identify the places concerned, although it’s believed that the casino markets of Cambodia, Vietnam and possibly South Korea and Australia are among those directly affected𑁋all destinations that have attracted sizable investment in resort-scale gaming around the expectation of VIP demand from China.
What is known is that China’s embassy in Cambodia recently warned China passport holders not to take part in gambling activities there after “multiple” cases of “violence” directed against Chinese, including some instances that had “resulted in deaths.”
“Many of those were led by gambling causes,” said the embassy, which also advised Chinese against “falling into the trap” of recruitment offers by what it termed online gambling companies, luring people to work in Cambodia for “high pay.”
“The law enforcement units of China and Cambodia are jointly enhancing efforts to combat every online gambling and telecom fraud activity involving Chinese citizens in Cambodia,” the embassy said.
In August 2019, Cambodia said it had stopped issuing new permits for entities looking to provide online gambling services and intended to phase the sector out entirely.
In October, China’s Ministry of Public Security said it had identified in the first nine months of 2020 the equivalent of nearly US$150 billion that was slated to exit the country for “cross-border” gambling activities.
“This is very unsafe for us,” said Liao Jin Rong, director-general the Ministry of Public Security’s International Cooperation Department, who called on the government to “severely crackdown in accordance with the law.”
Which is what appears to be happening. Earlier this month, the government said it had busted 3,500 cases of illegal cross-border gambling in 2020, arresting 75,000 suspects and shutting down more than 1,900 illegal payment platforms.
It’s not certain how these actions might affect the Macau market, although it’s believed that as part of China it likely enjoys protected status.
“In the near term, it’s inevitable we will see some dent in the pace of VIP recovery given potential collateral damage, junkets/agents who bring players to non-Macau markets are the same ones as those in Macau, and they will most likely keep a low profile for now to avoid any fallout from the clampdown,” said analysts with JP Morgan.
“Overall, we would characterize this news as short-term pain for long-term gain for Macau.”
