Macau’s Central Bank to Clarify Limits on ATM Withdrawals

Posted by: on December 10, 2016 in News | no responses

Earlier this week, shares of the companies that own Macau’s many casinos were sent drastically downward upon news that new limits will be placed on daily ATM withdrawals. A news story by the South China Morning Post indicated that ATM withdrawal limits would be reduced from a little over $1,200 to a little over $600; essentially cutting daily limits in half. It is easy to see why this is drove stocks downward as a decrease in ATM withdrawal limits is something that might impact casino revenues as a whole.

Monetary Authority of Macau to Clarify Policy

The affected customers are those who bank with China Union Pay. With that being said, China Union Pay is the number one bank for mainland Chinese citizens and, thus, the number one bank card used at Macau casinos. Despite the SCMP report, China Union Pay was quick to issue a statement that they had made no changes to daily overseas withdraw limits. As it stands, customers who are attempting to withdraw funds outside of mainland China will see their withdrawals capped at just shy of $1,449.

Even with Union Pay’s statement, shares were falling across the board. According to CNBC, Wynn Macau’s shares fell by almost 8% while Sands China saw their shares fall by just shy of 7%. That wasn’t the end of the story, either, because these same brands saw their US-facing shares fall as well.

CNBC’s Alex Bumazhny commented on the situation by saying, “This may actually impact revenues and we may have to reassess our forecasts for 2017, but it’s just so hard to determine at this point. This really will impact the mass market, which is really where the growth will be coming from. The VIP players will still continue to get their money from junkets, from the casinos as credit so this really will impact the best part of the market, the mass market.”

Insight on Macau

If you fancy yourself a geographer, you will notice that Macau is a small plot of land located on China’s south coast. It is home to many of the world’s most extravagant casinos and sees millions of tourists annually. Right away, you might be confused seeing as China is fairly restrictive when it comes to casino gambling. And when we say fairly restrictive, we really mean that it, flat-out, does not exist.

Macau, however, is known as a Special Administrative Region (SAR) of China. Being classified as a SAR means that Macau is, essentially, able to govern itself. As such, casinos have and continue to operate freely and legally. The first casinos appeared in the 1960s, but since 2000 the region has gained worldwide renown as one of the best places to play casino games.

In fact, of all places in Asia there are few better than Macau for gambling. For this reason it is pretty easy to see why daily limits on ATM withdrawals is such a big deal. Right now, these new limits are only going to impact certain customers, but there is no way of determining if that is all it will impact. We will continue to follow this story as it develops. There is a hope that the immediate outrage will cause Macau to reverse the decision, but there is no way of saying this for sure.