China's president declares war on global gambling

By: Shawn Tayor
Feb 28 2015
0

Chinese President Xi Jinping has officially declared war, on the global gambling and casino industry, warning foreign casinos that Chinese citizens will be gambling much less in China, neighboring countries, and the US. If he gets his way in convincing chinese nationals not to gamble their money away. This will also be an area that has our full attention."

Hua Jingfeng, a deputy bureau chief at the Ministry of Public Security said earlier. "A fair number of neighboring countries have casinos, and they have set up offices in China to attract and drum up interest from Chinese citizens to go abroad and gamble. This cannot be the case of setting up business in China, and lure locals away

"Some foreign countries see our nation as an enormous market, and we have investigated a series of cases".

In other words, Xi is telling companies around the world, that saw their revenue triple when Macau opened up to foreigners, that the Chinese gambler will not be following them abroad to countries like Singapore and the Philippines, where billions have been spent on new projects to attract those same people.

Asian companies have heretofore capitalized, on the traveling Chinese gambler in the Philippines, Australia, and especially Singapore. A combination of tax credit and increased gambling revenue, in Singapore saved Las Vegas Sands' fourth-quarter earnings. Now that's set to take a hit.

And Chinese gamblers apparently won't be going to Macau as much to gamble, either. Xi's government has sworn to cut down on advertisements, sometimes in the form of annoying text messages, promoting Macau casinos. Visa restrictions will tighten, according to analysts, and even retail gamblers, will have their money tracked by officials monitor UnionPay, the only domestic bank card in mainland China.

The latest announcement goes above and beyond the pain Xi's administration has already put Macau's casinos, and the world's casino companies, through over the past year. The president's anticorruption crackdown has slowed the movement of mainlanders to the island, the world's largest gambling center, dramatically. Gaming revenue in Macau contracted for the first time, since foreign companies were allowed to do business on the island in 2002.

It plummeted 30% in December alone. The junket system, Macau's financing system for high rollers most affected by the anticorruption drive, is on life support after 16% of junkets closed in 2014. So Xi's declaration is coming when companies around the world, from MGM to Las Vegas Sands, from Macau-based companies Melco to SJM Holdings, are at their most vulnerable.

Article source: UK insider


Shawn Taylor

How serious can we take this action by the Chinese government? A fact is Chinese like their gambling as we often can see in casinos.