As Macau casinos bid on new licenses, Chinese regulators could use leverage to introduce experimental implementations of the digital yuan.
Current concessions in the $ 37 billion market are about to expire, forcing local casinos to renew their licenses for the first time in 20 years.
Digital Yuan testing grounds in Macau
Chinese regulators are expected to take advantage of the situation by forcing operators to allow experimental use of the digital yuan in their casinos. Other ideas, according to a government consultation paper, include oversight of day-to-day operations by government officials.
As Macau exists outside of Chinese capital controls, authorities see it as an ideal environment to further test the use of the technology. It would also strengthen China’s oversight of digital payments.
While they may have already been concerned about such oversight scaring off big spenders, the license renewal process has made incumbent companies like Wynn Macau and Galaxy Entertainment keen to please. Plus, the big guys no longer dominate the rankings, despite losing an average of more than $ 27,000 on each table visit, according to analysts at Bernstein. Currently, the mass market accounts for two-thirds of gaming revenue, accounting for almost 90% of revenue, Breakingviews estimates, citing official data.
In addition to monitoring payments, Chinese authorities are also touting the introduction of digital payments in casinos as a way to fight corruption. Last month, Suncity’s junket chief Alvin Chau was arrested for his alleged connection to an illegal cross-border gambling and money laundering syndicate. Prior to COVID-19, Suncity generated around $ 8 billion in gaming revenue by making betting easier for wealthy MVPs.
In November, China’s central bank governor Yi Gang suggested that the digital yuan could help fight financial crime, such as money laundering, by solving complex cross-border payments issues. In the same month, it was reported that China was considering launching a digital yuan-based exchange in Beijing.
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