VIP rally may have come too soon
A new report by brokerage Sanford C. Bernstein says Macau could be heading into trouble as the Mainland Chinese government once more cracks down on corruption.
The report’s subtitle sums up the situation: “China Premium Tracker: The Good Times Continue—But Could Anti-Corruption Rear Its Head Again?”
In the study, according to Inside Asian Gaming, analysts said a 25 percent year-on-year spike in violations of President Xi Jinping’s Eight-Point Regulation of the Centre, also called the Eight Rules, suggests a new crackdown on VIP spending is on its way. A similar anti-corruption campaign preceded the previous decline, which started in the summer of 2014 and lasted 26 months, only starting to ease in August 2016.
Surprisingly to some, VIPs who fled during the recessionary period have returned full force. From April to June, VIP baccarat rooms at Macau’s casinos generated $4.46 billion—a year-on-year increase of 34.8 percent, reports the Jing Daily, adding that those numbers may be a red flag to Xi’s government, which is trying to “clamp down on outward capital flows disguised as gambling or luxury tourism.” In other words, “the recovery may be moving along too quickly” for Beijing’s tastes, Jing suggested.
A sign of renewed scrutiny is Macau’s new “trigger amount” of cash or negotiable currency that must be declared before the Macau Customs Service. Starting November 1, all people leaving or entering the gaming hub must declare amounts of MOP120,000 (US$15,000) or more. The new regulation, approved in May, is designed to help fight money laundering in the city.
