International edition
October 27, 2021

As China resumes Macau tourist visas Thursday, more arrivals could lead to more cash being pulled out

Macau: VIP customers' cash withdrawals climb, casinos set limits

Macau: VIP customers' cash withdrawals climb, casinos set limits
With thousands cashing out chips, some cash machines and exchange desks around Macau have briefly showed limited or no availability in recent weeks.
Macau | 09/23/2020

As customers started pulling out money amid fears of a broader crackdown on online gambling by China, junket operators have begun taking back deposits from the casinos. Some casinos have put limits on the amount of cash chips that can be withdrawn

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oncerns around China’s crackdown on online gambling to help contain capital outflows could be broadened has brought about a rush to withdraw billions of dollars from Macau, threatening a economy recovery after the pandemic impacts, according to Reuters.

A growing trend to withdraw money from junket operators started in July after Beijing identified the cross-border flow of funds for gambling as a national security risk. The customer withdrawals have spilled into the broader casino industry, leading to a cash crunch in Macau's VIP sector at a time the Chinese territory is struggling to recover from COVID-19 restrictions that have seen tourist numbers and gambling revenues drop significantly.

Several executives told Reuters that cash was being taken out in the billions of Hong Kong dollars. While Macau casinos have ample reserves to ride out several months of zero revenues, the rising cash withdrawals point to a major loss of confidence in the crucial VIP junket sector in a further blow to the economy, analysts said.

The sector accounts for around 50% of overall gambling revenues, which hit $36.5 billion last year. The pandemic has already ravaged the economy with gambling revenues down around 96% in the second quarter year-on-year.

The withdrawals began when hundreds of customers tried to pull deposits from top junket Suncity, at its VIP clubs across Macau, over fears it was being targeted by Chinese authorities. Suncity denied the allegations. The group then began restricting withdrawals, sparking a panic rush by customers seeking to pull their money from all junkets, executives said. Suncity said it was acting in compliance with new casino policies.

Junkets in the former Portuguese colony are licensed to provide customers with chip deposits and withdrawal services on behalf of casinos Sands China, Wynn Macau, MGM China, Galaxy Entertainment, SJM Holdings and Melco Resorts. As customers started pulling out money amid fears of a broader crackdown by Beijing, junket agents in turn have begun taking back deposits from the casinos.

Casinos have reacted by putting limits on the amount of cash chips that can be withdrawn, executives said. “The crackdown on the cross border transactions have finally rammed home the inconvenient fact that Macau has always been dependent on outflow of funds from the mainland," said Ben Lee, founder of Macau gaming consultancy IGamiX.

In some casinos, customers can now only withdraw HK$1 million ($129,039) compared with HK$5 million in recent months and only the account holder can withdraw, say executives. Any transaction over HK$200,000 is now flagged, leading to people carrying around HK$5 million in chips in multiple sets of $10,000 to avoid detection. With thousands cashing out chips, some cash machines and exchange desks around Macau have briefly showed limited or no availability in recent weeks.

Macau’s monetary authority told Reuters the supply of Hong Kong dollars is “currently” stable and that it has taken measures to ensure the adequate supply of currency. The withdrawals come as China fully resumes Macau tourist visas from Sept. 23, and executives warn that more arrivals could mean more cash being pulled out.

Some Suncity customers, angry at not being able to get their funds, have started an online group called Suncity victims’ and are planning a protest on Sept. 23 at VIP rooms across Macau.

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