Macau Casino Licenses Expire First Time In 20 Years, China To Leverage This For Implementing Digital Yuan

• Regulators of China plan to initiate experiments of using digital yuan in casinos in Macau, as casinos start to bid on new licenses.

• As per reports, the huge market of casinos estimates about 90% of the revenue of the gaming industry.

• Also, authorities in China are overwhelmingly promoting the utilization of digital payments in casinos due to their belief that it might help everyone fight corruption. 

Macau Casinos have started bidding on new licenses, which can be leveraged by regulators of China to initiate experiments of implementing the digital yuan. The $37 billion market’s current concession is set to expire soon which would force casinos to get their licenses renewed for the first time in the past 20 years. However, it is expected that the Chinese regulators might use this condition to force casino operators to begin the experimental implementation of the digital yuan in their casinos. 

As per some new websites, a government consultation paper revealed that there are other ideas as well, one of which is to have government officers look after everyday activities. The authorities of China also see Macau as a suitable place to test the technology additionally, as Macau is outside the capital control of China. This might even support China’s failure on digital assets, cryptocurrencies.

The Fear Of Casinos

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Although existing enterprises like Wynn Macau and Galaxy Entertainment were initially concerned that such scrutiny would scare away big spenders, the re-licensing process has made them eager to please. According to Bernstein analysts, high rollers no longer dominate the standings, despite losing an average of nearly $27,000 every table visit. According to some financial commentary companies, which cites official figures, the mass market currently accounts for two-thirds of gaming revenue or nearly 90% of earnings.

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Apart from payment oversight, Chinese authorities are promoting the use of digital payments in casinos as a way to combat corruption. Last month, Alvin Chau, the head of the Suncity junket, was arrested on suspicion of being involved in an unlawful cross-border gambling and money laundering scheme. Before COVID-19, Suncity produced over $8 billion in gambling revenue through organizing bets for wealthy MVPs.

Fight Against Financial Crimes

Chinese central bank governor Yi Gang indicated in November that the digital yuan may aid in the battle against financial crime, such as money laundering, by resolving complex cross-border payments issues. China was said to be considering opening a digital yuan-based exchange in Beijing the same month.

Moving the gaming hotspot to digital payments would help Beijing achieve its goal of better control over financial flows and consumers. Macau is a perfect venue to test the technology before it is rolled out more extensively on the mainland because it is free of Chinese money regulations. Others are already thinking about cashless casinos that use traceable payments. For example, Star Entertainment (SGR.AX) in Australia says it is looking into digital payments to satisfy its auditors.