China’s central bank digital currency is expected to further exacerbate Macau’s declining gambling revenues.
According to a Dec. 2 article from Bloomberg, junkets — Macau businesses that act as middlemen to facilitate visits by China’s high-roller gamblers — claim their clients are looking to other jurisdictions due to concerns the digital yuan will be introduced to Macau’s embattled gambling sector.
The report cites anonymous sources who claim local casino operators have been approached by Macau’s Gaming Inspection and Coordination Bureau to discuss the viability of denominating casino chip purchases in digital yuan, rather than Hong Kong dollars as is presently the case.
The sources noted that popular digital payment platforms such as AliPay and WeChat are not being considered for use in Macau’s casinos as they will not assist the central government in tracking capital flows.
However, a Dec. 2 statement from Macau’s Government Information Bureau asserts that the rumored discussions concerning “the use of digitized RMB in gaming casinos […] is false.”
Regardless, the rumors have sent shockwaves through the territory’s gambling industry, with shares in casino operator Galaxy Entertainment Group and Macau’s largest junket operator Suncity Group Holdings each falling by roughly 3% on the same day.
The introduction of the digital yuan into Macau’s casinos would threaten the junkets industry, which garners significant revenue from providing Hong Kong dollar conversion and credit services. With Macau’s revenue falling by $27 billion amid the pandemic, junkets are already feeling the pain.
China’s central bank would also gain greater insight into the sources of the capital flowing into Macau’s gambling industry, which Bloomberg’s sources claim may scare off many high-rollers — some of who have previously been linked to the Chinese shadow banking system. Junket service provider, Eric, Leong told Bloomberg:
“If the water is too clean, there’ll be no fish. The big gamblers will go away if casinos need to be that transparent.”
Last month, Cointelegraph reported that China’s digital yuan would be trialed in the Suzhou district for the “Double 12” shopping event on Dec. 12. The shopping festival, which is hosted by e-commerce behemoth Alibaba, will see participants gifted $200 worth of digital RMB via a lottery to spend during the day. The event will also trial the CBDC wallet’s “offline” and “touch” functionalities.
The pilot follows successful trials of the CBDC in Shenzhen that saw $1.5 million worth of digital yuan distributed via a lottery to roughly 50,000 Luohu district residents to spend at more than 3,000 merchants in October.