Victor Ugochukwu · Dec 14, 2020 . 5min read
Digital Yuan poses threat to Macau’s Gambling Industry
Casino executives in Macau’s gambling market fear that their industry is in danger if China’s digital yuan is implemented in the country.
By Komal Joshi · Dec 4, 2020 . 6min read
Gambling companies in Macau are leaving the industry. According to Bloomberg, some operators have already started shifting their operations away from the gambling hub. Some are refraining from Macau after the regulators discussed the possibility of combining their casino operations with the digital Yuan. Gamblers in Macau feel that the gambling industry is in threat if China’s Digital Yuan comes into existence.
Macau’s Gambling Industry finds it challenging to earn a substantial revenue.
The industry’s revenues are getting affected owing to the more stringent regulations and the COVID-19 pandemic. Moreover, the city of Macau has undergone a reduction in revenue by $27 billion this year. It is owing to the COVID travel barriers that kept profitable Chinese gamblers off. Gambling executives see China’s plan to launch the digital Yuan, as a possibly more significant threat to the casino industry in Macau. It is the largest gambling hub in the world.
This occurs after Macau gaming regulator, the Gaming Inspection and Coordination Bureau, proposed several casino operators to consider the likelihood of replacing Hong Kong dollars with the usage of digital Yuan in buying gambling chips. Moreover, the proposal has expressed shock waves amongst the operators in Macau. Hong Kong dollars’ relative anonymity has been performing a significant role in the operation of Macau’s gambling industry.
Macau is the only legal territory to gamble in China.
Macau and Hong Kong are two special regulatory territories of China. Macau city is the only part of China where gambling is allowed. Gambling is one of the important industries of the city. However, over 58,000 people participate in the gambling and gaming industry, and approximately 98% of them are operating in casinos. Casinos provide revenues of approximately $45 billion. Moreover, 66% of all revenues by casinos come from high rollers. As China is stimulating the digital yuan pilot program in major cities, the initiation of the CBDC would influence Macau’s junket industry.
Nevertheless, digital Yuan’s implementation would indicate that Beijing would have comprehensive clarity and control of financial flows in Macau. Moreover, High-roller Chinese gamblers may shy away from utilizing the Macau casino junket system. The role of junket operators usually includes providing hotel stays, private jets, and other accommodation. Further, it also involves offering support services to high-roller gamblers for gambling in Macau’s casinos. Thus, junket operators are evaluating opportunities to counter threats challenging revenue generations in the casinos.
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