Want China Times – After years of smooth sailing, casino-related stocks on the Hong Kong market have finally seen their wild party coming to an end, with the eight major casino stocks seeing their market value nosedive by HK$191.5 billion (US$24.7 billion) this year as of May 12, reports Guangzhou’s 21st Century Business Herald.
What triggered the crash was concerted action between China’s central government and the Macao government in cracking down on underground gambling of Chinese mainlanders at Macao casinos.
High rollers from mainland China account for two thirds of the region’s gambling income, and Macau has become a hotbed for money laundering. Most of these gamblers are paying for their stakes via China UnionPay cards, often with the use of mobile devices, also known as point-of-sale (POS) devices, in order to cover up their gambling and money laundering activities, the paper said.
“Some 200 billion yuan (US$32.1 billion) of gambling at Macao casinos every year involves the use of China UnionPay cards, 20% of which via POS machines,” said an operator of a Macao casino, also a member of Assembleia Legislativa, Macao’s legislative body, who asked not to be identified.
In response to the rampant illicit gambling, China UnionPay on May 7 publicized a series of measures dedicated to crack down on “overseas money laundering, capital flight, and other illegal use of China UnionPay cards” in Macao.
The influx of Chinese gamblers has fueled Macao’s thriving casino business. In 2012, total revenue of Macao’s 35 casinos hit 238.2 billion yuan (US$38.2 billion), a record high, which rose to 282.4 billion yuan (US$45.3 billion) in 2013 and 800 billion yuan (US$128.4 billion) in the first quarter 2014, according to the region’s Gambling Inspection and Coordination Bureau. Macao now boasts the world’s largest casino market, with revenue six times that of Las Vegas.