Macau Eases Concerns Over ATM Limits After Stocks Dive

This week, Macau casino stocks tumbled after a report surfaced that the Monetary Authority of Macau would reduce ATM limits for Chinese gamblers. Reacting to the stock nosedive, Macau insists that the report is false and they won’t be tightening daily cash withdraw limits.

As we’ve discussed before, the Chinese government is cracking down on corruption in the country, and this includes tightening restrictions on money laundering in Macau. During the two-plus years that the crackdown has been happening, Macau casinos have seen their revenue fall.

Based on a tip from a financial industry source, the South China Morning Post reported that lowered ATM limits were part of the ongoing corruption cleanup. Specifically, the paper claimed that daily limits would be halved for UnionPay users — China’s biggest bank card provider — to 5,000 patacas (US $626).

Macau’s Monetary Authority disputes this claim, stating that they merely limited single transactions to 5,000 patacas. This was backed by UnionPay, which stated that they haven’t changed their overseas policy, and the daily limit in Macau and other international destinations is still 10,00 yuan (US$1,450).

ATM withdrawals aren’t even a common way for Chinese high rollers to get their cash. But the South China Morning Post story was still enough to alarm investors and drive casino stock prices down.

Monthly revenue in the world’s largest gambling destination had been declining for two years, fueled by the government crackdown. But it just recently started increasing again in August.

While it turns out that Macau’s action against ATMs isn’t a big deal, analysts warn that broader changes could be coming as China looks to control capital outflows.

“The risks of more capital outflow control measures should not be ignored,” said Chelsey Tam, analyst at Morningstar, while discussing how cash flow restrictions could slow Macau’s gaming recovery.

One example is the Chinese State Administration of Foreign Exchange (SAFE), which is scrutinizing transfers worth $5 million or more.

Despite the restrictions on cash flow, Macau’s casinos are continuing business as usual. The Grand Lisboa casino operated like it was any normal day on Friday, and the owners didn’t seem worried about the cash withdrawal limits.

Reuters spoke with a pawn shop owner named Cheung, who said that an official crackdown is unlikely to stop money laundering, given all of China’s other illegal channels.

“What’s the point of just restricting Macau? Don’t you think mainland Chinese will just take their money to the Philippines or Singapore?,” said Cheung.