China is undergoing a revolutionary financial update with their announcement of a government cryptocurrency. This is because they are the first country to create a digital currency under the control of their central bank. However, it does present some worries for casino havens like Macau. Thus, the big question is Will China’s Cryptocurrency Affect the Casino Industry in Macau?
First off, the idea behind the digital yuan is to enable the Chinese government tools to monitor its economy. Furthermore, China’s cryptocurrency will allow them to monitor its people and make it easier to track financial transactions.
However, this last bit of information could cause problems for casino junkets in Macau.
How will China’s Cryptocurrency Affect the Casino Industry in Macau
According to gambling news, Macau plans to make it mandatory to use China’s cryptocurrency in its casinos once it available. Macau gets 70% of its tourists from China every year which makes economical sense for that decision. However, some of concerns by casinos is that it will affect casino junkets from bringing VIP gamblers.
Casino junkets are intermediaries that promote casinos to VIP players and receive a commission from the casino. Furthermore, they often serve as a bank-like entities by providing a line of credit to casino players. Thus, this is where a problem could arise. This is because they often serve as a way to launder money and come from underground lending services.
Even though casino junkets are not popular with the law, they do provide a large amount of revenue to casinos. In fact, in some casinos, the VIPs they provide account for as much as 70% of their revenue.
The government in Macau needs the support of the Chinese government since their revenues are dependent them. Therefore, according to casino forums, they have made several implementations to keep them happy. This includes facial recognition software at ATMs to banning proxy betting, using underground banking and limits to overseas accounts.
While it was just a matter of time for the elimination of casino junkets, this comes at a difficult time for Macau. This is because its gambling revenue went down by 80% last year. Furthermore, with online casinos, Macau is in a world of financial hurt.