Recent legislative amendments in Macau aim to tackle the rising problem of illicit money exchange operations, a key issue that has caught the attention of both local and mainland Chinese authorities, a gaming researcher and academic tells AGB.
According to Carlos Siu Lam, an Associate Professor at the Macau Polytechnic University Center for Gaming and Tourism Studies, these changes are part of a larger effort by mainland China to crack down on illegal financial activities.
“With the increased number of cases related to illicit money exchanges—such as unauthorized credit services, cross-border money remittances, and group fights among casino patrons—it’s clear that such acts are not vastly different from those of junket operations in the past. There is a pressing need to suppress these activities”, Siu told AGB.
Recently, it was revealed that Macau is set to criminalize illegal money exchanges at casinos.
The proposed law, currently under review by the 2nd Permanent Committee of the SAR’s Legislative Assembly, includes provisions for a maximum penalty of five years in prison for anyone involved in unauthorized currency exchange for gambling purposes. This legislation will also cover any exchange activities in casinos and surrounding tourist facilities.
All related facilities used for games of chance or other business activities will be deemed part of the ‘casino,’ expanding the scope of regulation significantly.
Beyond prison sentences, offenders may be banned from entering Macau casinos for periods ranging from two to ten years. These changes are expected to go to a vote later this year, reflecting the government’s commitment to tackling this issue head-on.
The president of the 2nd Permanent Commission of Macau’s Legislative Assembly has highlighted that the activities of money exchange groups have intensified and have led to disruptions for other players and the overall functionality of casinos.
Following orders from the above
The response from the SAR authorities comes after China’s Ministry of Public Security urged enhanced cooperation between security forces in Macau and the mainland to address these illegal operations effectively.
The emergence of unregulated “money changers” near Macau’s casinos has become a pivotal method for shifting funds across jurisdictions, particularly between the mainland and Macau.
The link between these illicit practices and the earlier junket system highlights the desire for tighter regulatory control to ensure a safer and more stable gaming environment.
The question of whether more policies will arise to combat these illegal activities has also been addressed by Siu, who commented to AGB that more policies to handle these activities and operations are expected from both sides of the border.
When asked about the potential impact on Macau’s gross gaming revenue (GGR), Carlos Siu stated that “such acts will have some effect on the revenue from the VIP segment. For the mass floor, it is not going to affect the revenue.”
For Siu, this suggests that while high-stakes gambling may see a decline due to stricter regulations, the broader mass gaming sector is likely to remain stable.
According to Chinese authorities, criminal groups illegally exchange large amounts of Hong Kong dollars, via clandestine banks, in places such as Zhuhai, and then smuggle this money to Macau, where it is distributed to gamblers from the mainland.
These illegal money changer groups allow Chinese gamblers to bypass Beijing’s restrictions on moving money out of the country by offering currency exchange services, often at hotel properties.
The movements of the mainland Chinese authorities have been followed by operations by local authorities, with Macau’s gaming watchdog – the Gaming Inspection and Coordination Bureau (DICJ) – reporting that the police authorities in Macau and mainland China have carried out exclusive actions to combat illegal scalpers.
Between January and May this year, Macau police said they intercepted 1,924 illegal money changers, whom they banned from entering the territory.
Additionally, 927 individuals were added to the casino no-entry list, and administrative sanctions were applied to 30 residents for illegal currency exchange.
