China’s government is launching a new drive to cut off the illegal cross-border flow of gambling funds.
A report published by state-run news agency Xinhua said Deputy Governor Fang Yi Fei of the People’s Bank of China met recently with representatives of several government departments, including the Ministry of Public Security, the Banking and Regulatory Commission and the State Foreign Exchange Administration, and financial services provider China UnionPay, to outline plans to “strengthen and reinforce the governance of cross -border gambling financial chain regulations.”
Fang reportedly requested that all financial sectors strengthen their capability to track and rapidly submit reports of large and suspicious transactions, to monitor and analyze money laundering, to place more attention on account identity verifications and implement other risk prevention and control efforts.
The report characterized the effort as a “major political mission.”
Since taking power in 2012, President Xi Jinping has identified capital flight as a serious problem, and this has landed Macau in the government’s cross-hairs on more than one occasion. It’s not believed, however, that the casino hub is the target of the current drive.
“It’s difficult to know what the exact scope of subject matter was, since ‘cross-border’ gambling often refers to ‘illegal gambling,’ particularly online casino operation by junkets such as those from Philippines and Cambodia,” stated a team of gaming analysts with JP Morgan.
They added, “We note the China government has recently broken up a series of illegal online casino rings across different provinces, which leads us to think the meeting was probably more related to those incidents (as opposed to Macau SAR, where the business has effectively been closed for four-plus months and counting).
“In short, we wouldn’t necessarily think the meeting focused on Macau and/or ‘legal’ casino operations.”
