Investors in Macau casino stocks have taken new modalities of ATM services in to be a sign that China, which administers the semi-independent territory of Macau, is intent on enforcing tighter controls over the gambling industry. Macau gambling facility operators have seen a significant drop in their revenues since UnionPay’s renewal of ATM machines.
UnionPay’s ATM upgrade installs a technology in the cash-dispensing machines that recognizes users through facial recognition software, Casino.org has reported. This will allow gambling authorities to more tightly control ATM transactions in Macau. UnionPay is the only company authorized to issue banking cards in Macau. It is an affiliate of the People’s Bank of China, the central bank of the People’s Republic of China.
The ATM machine upgrade is aimed at limiting money laundering practices in Macau. Due to the enormous amount of international monies that flow through Macau’s casinos, the Chinese government has a strong interest in curbing money laundering. The measure was immediately unpopular with investors, causing stocks in Macau gambling ventures to drop.
The Las Vegas Sands, which is traded on the New York Stock exchange and operates The Venetian Macao hotel and casino on the Cotai Strip, saw its stock fall by 3% yesterday. MGM Resorts reported a drop in stocks of 1.4%, Wynn Resorts of 1.5%, and Hong Kong-based Melco Entertainment saw a drop of 4.5%.
Still, a report by JPMorgan expressed optimism that the gambling industry in Macau is again experiencing gains after a 2-year financial crisis. The Las Vegas Sands, MGM Resorts, Wynn Resorts, and Melco Entertainment all posted better profits than expected for the first three months of 2017, JPMorgan noted. Over the first four months of 2017, gambling revenue in Macau overall increased by 14%.
Located about 60 km from Hong Kong, Macau is officially recognized by China as an autonomous territory. Although it is officially administered by the People’s Republic of China, Macau’s government has settled on a “one country, two systems” administration that permits Macau its own monetary and legal systems.
Macau’s Cotai Strip is the result of a land reclamation project. Its name is a portmanteau of the names Coloane and Taipa, the two islands that were joined as part of the reclamation project. The term “Cotai Strip” was coined by the Las Vegas Sands company, a comparison of the Macau neighborhood to the Las Vegas Strip.