Macau calms fears over ATM limits
The government of Macau has denied the recent imposition of a withdrawal limit on the casino ATMs will have an impact of the gambling industry in the former Portuguese colony.
The Monetary Authority of Macao has set a limit of MOP5,000 (US$626) per transaction from UnionPay ATMs after concerns from the Chinese government about how illegal money was being funnelled out of the mainland.
The decision sent global casino stocks into freefall, with several of the major players heavily invested in the Macau market seemingly blindsided by the move.
However, the Monetary Authority has since clarified that the daily withdrawal limit with the use of such cards outside mainland China remains at CNY10,000 (US$1,449).
“The new limit per transaction for cards issued by Chinese banks is in order to further strengthen the measures to regulate mainland bank card cash withdrawals,” said the Monetary Authority.
“The measure is not expected to have any impact on day-to-day ATM cash withdrawal through ATM by Macau residents, neither normal overseas cash withdrawal by Mainland bank card holders will be affected,” it added.
Effectively, it doesn’t mean that the amount of money that can be withdrawn by gamblers in Macau is halved, just that they would need to make two withdrawals instead of one.
“The effect of this new change would have no material impact on Macau GGR [gross gaming revenue],” Brokerage Sanford C. Bernstein Ltd said
While the majority of major casino stocks are listed on the American stock exchanges which are yet to open for the week, the Australian-listed Crown Resorts, which dropped 70 cents to $11.33 when the news broke on Friday morning, has only recovered to $11.42 on Monday trading.
The stock price Star Entertainment Group, which operates Sydney’s The Star casino, was largely unaffected by the news, dropping 8c on opening on Friday, but recovering quickly. Star is not invested in Macau.
The nervousness of global markets is a great example of the peril of casino stocks at the moment with Macau just emerging from a two and half year slump to record growth over the past few months.