Macau Adds Criminal Penalties for Illegal Currency Exchanges in Casinos

Macau's government has introduced an amendment to its "Law to Combat Gambling Crimes," proposing criminal penalties for illegal currency exchanges within the city's casinos. The amendment, which will be reviewed in the upcoming legislative session, includes prison terms of up to five years for offenders. This change marks a significant shift in Macau’s approach to curbing illicit financial activities linked to gambling.

On Friday, government officials in Macau announced the amendment, which would criminalize unauthorized money exchanges inside casinos. Legislative assembly chairman Chan Chak Mo stated that lawmakers are expected to vote on the bill before the end of the year. The proposed amendment, now part of the draft "Law to Combat Gambling Crimes," not only introduces potential prison sentences of up to five years but also imposes bans on offenders, preventing them from entering Macau's casinos for periods ranging from two to ten years. However, the law does not impose penalties on casino-goers who utilize these unauthorized exchanges.

Illegal money exchanges have long provided a means for gamblers from mainland China to bypass Beijing's stringent controls on capital outflows and cross-border gambling, fueling a significant underground economy.

The government's crackdown on these illegal activities began in June when Macau’s Ministry of Public Security announced efforts to curb unauthorized money exchanges. At that time, the ministry did not introduce criminal penalties but did link these operations to a range of serious crimes, including fraud, theft, money laundering, loan sharking, and even kidnapping and murder.

The timing of the amendment's announcement on August 9 is notable, coming just days after the murder of a man involved in the illegal money exchange trade. The victim was found on August 7 in his Cotai hotel room, having suffered fatal stab wounds to his head and neck. Local reports indicate that he had been part of a money-exchange gang since the beginning of the year and had recently won approximately HK$2.5 million (£251,000/€293,500/$321,000) at a local casino. Authorities have arrested two suspects in connection with the murder: a man from mainland China and a woman from Hong Kong, both allegedly involved in the illicit exchanges.

Analysts have noted that the government’s tougher stance on illegal money exchanges has contributed to a decline in gaming revenue in June and July. Macau casino stocks reacted negatively to the news of the proposed amendment, with Galaxy Entertainment Group Ltd’s shares dropping by as much as 5.7%, while Sands China Ltd’s shares decreased by up to 5.2%. Citigroup analysts warned that “this negative news could add uncertainties and hurt the already fragile investment sentiment” in Macau’s gaming industry.

Macau officials have expressed concern that these crimes have “seriously affected social stability” in the region, which is the only place in China where gambling is legal. They have pledged to dismantle the "entire industry chain" involved in illegal money exchanges through targeted interventions, including increased border checks.

So far this year, authorities have apprehended around 1,900 unauthorized money changers in police operations, denying them entry to Macau. Of these, 927 individuals were reported to the Gaming Inspection and Coordination Bureau (DICJ) and subsequently banned from the city's more than 30 casinos. Additionally, during the first five months of the year, 30 Macanese residents were found to have participated in these illegal operations.

By fLEXI tEAM