Sunday, July 3

Macau regulators to double down on the digital yuan

China is going to bet on the digital yuan. As Macau casino owners prepare to bid for new licenses in the city for the first time in two decades, regulators will seize the opportunity to squeeze a little more out of them in 2022. Hopefully they will oblige the gambling center operators offshore to become test benches of the digital yuan.

As current concessions for this $ 37 billion market expire, companies like Sands China and Wynn Macau will be eager to show they play as a team. Regulators are already flexing their muscles. In a government consultation paper on the new bidding process, ideas such as appointing government agents to oversee day-to-day operations are proposed.

Bernstein analysts estimate that the average player loses more than $ 27,000 on every visit to the Macau tables. It has also been a refuge for corrupt officials and businessmen. In December, the chief operator of junket Suncity, Alvin Chan, was implicated in an investigation into illegal gambling. Suncity made it easy for wealthy VIPs to gamble, a market segment that had revenue of about $ 8 billion from gambling in the year before the Covid-19 hit. Just a month earlier, central bank governor Yi Gang suggested that the new Chinese cryptocurrency could be useful in fighting crime and solving complex cross-border payment problems, including money laundering. It is possible that he was thinking of Macau.

The migration from the gaming hub to digital payments would complement Beijing’s desire for greater oversight of cash flows and customers. Situated outside of Chinese capital controls, Macau is also an ideal place to test the technology before deploying it more widely on the mainland. Others are already considering the concept of cashless casinos that use traceable funds. Australia’s Star Entertainment, for example, says it is exploring digital payments to calm its watchdogs.

VIP favorites like Galaxy Entertainment and Wynn Macau may have once feared that big spenders would shy away from such scrutiny. However, the big players no longer rule the income statement. The mass market now accounts for two-thirds of gaming revenue and nearly 90% of revenue, according to official data and estimates from Breakingviews.

The technology is here: Trials are already underway, and Chinese consumers have already spent about $ 10 billion in digital yuan in the pilot tests. Although watchdogs have a lot to gain and operators less to lose, 2022 will be the year the new currency hits casinos.

Reference-cincodias.elpais.com

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