Union Pay removes ATM terminals
Macau has a new weapon in its war on money laundering in the local casino industry. According to a new measure recently announced by the government, users of China UnionPay Co. ATM cards will soon be required to show mainland identification cards and also have their identities verified through a facial recognition system in order to make cash withdrawals. The technology will be eventually applied to all ATMs, focusing on ones in or near the city’s casinos, reported Bloomberg News.
“The government spares no effort to implement anti-money laundering and anti-terrorism rules,” said a statement about the new rule.
Excessive cash outflows by Mainland Chinese gamblers could add up to billions of dollars, affecting the value of the currency and draining capital reserves, Bloomberg reported. In a note following the news, JPMorgan Chase & Co. analyst DS Kim wrote that it’s not uncommon to see people using more than one card to withdraw cash from Macau ATMs, often in order to gamble in the city’s casinos.
“We can’t rule out any potential impact on player psychology, as some players/junkets may feel reluctant to use ATM cards given increased ID checks,” Kim wrote. “The news could and will likely remind many investors of how vulnerable the sector is to regulatory issues, and may serve as a wake-up call to the sector’s inherent headline risks.”
Shares of Macau casino operators took a hit last week after Union Pay removed its ATMs, to replace them with new ones using facial identification technology. According to GGRAsia, the Las Vegas Sands Corp. and Wynn Resorts Ltd. were among the operators that saw share values tumble after the move by Union Pay.
ATM customers in Macau withdraw as much as 10 billion Hong Kong dollars a month (US$1.28 billion), according to the South China Morning Post.
“History tells us that, while there could be a near-term blip in middle-market mass gaming revenues, Chinese gamblers are very resourceful in trying to move money out of the mainland,” wrote Instinet LLC analyst Harry Curtis in a research note.
Sands U.S. shares dropped 2.8 percent to $57.13 on the news. Wynn declined 1.5 percent to $120.27. Melco Resorts & Entertainment fell 4.5 percent to $21.34.
