China statement a warning to junkets: Bernstein

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China’s statement on online gambling in Manila could be seen as a warning to junkets and online gaming operations about gambling outside of Macau, Bernstein analysts wrote in a note.

“If the warning is not heeded by the offshore operators, then China will likely begin a broader crackdown, which would be negative for POGOs and Philippine casinos,” it said, referring to Philippine Offshore Gaming Operators. 

Bernstein said China will be taking a stronger stance in trying to curtail gambling overseas outside of Macau, which in the longer term may be beneficial for the territory, which is the only place in China where gambling is legal.

“Some gaming demand may return to the territory which is under Chinese jurisdiction and control,” it said. 

The Chinese embassy in Manila on Thursday issued a statement urging Manila to ensure the wellbeing and safety of its citizens working for POGOs. But it also made clear it would not tolerate the proliferation of businesses targeting Chinese.

There has been growing signs about Beijing’s unease over the number of gambling operations across Asia that are targeting the mainland, either through online streaming, or by luring its nationals overseas.

The embassy statement warned that it’s illegal for Chinese citizens to gamble and said it would step up its crackdown on illegal cross border operations. 

The statement follows an article in state media earlier in July targeting Macau’s largest junket operator, Suncity Group Holdings, accusing it of illegal online gambling and proxy betting. The group has denied the allegations.

According to local media reports, Macau’s Gaming Inspection and Coordination Bureau (DICJ) has also issued a directive to junkets preventing them from settling overseas transactions in Macau. That order came into force on August 1.

Bernstein noted that Melco Resorts and Entertainment, has curtailed proxy betting at its City of Dreams Manila as of July.