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China imposes new Union Pay limits

China's State Administration of Foreign Exchange has imposed new restrictions on UnionPay cards, effective on January 1, 2018, though the impact on Macau GGR is expected to be limited.

ATM daily and annual cash withdrawal limits per card for both RMB cards and foreign currency cards will be unified to be RMB 10,000 ($1,540) per day and RMB 100,000 per year respectively. There had previously been no limit on foreign currency cards. The annual limit on RMB cards has been RMB 100,000.

There is also a new personal limit of RMB100,000 per year per individual, irrespective of how many UnionPay accounts or cards that person may have. There had been no limits previously (i.e., an individual with multiple accounts cold withdraw RMB 100,000 per year on each account.

Individuals exceeding their annual overseas cash withdrawal limit will see their ATM cash withdrawal abilities suspended for the rest of the year as well as the following year.

Union Gaming said in a note that it doesn’t expect the new measures to have a material impact on GGR. It points at that the mass sector is unlikely to be affected as their contribution tends to be below the threshold limits, while VIP is generally playing on credit.

“Put together, we would not expect there to be any measurable impact on Macau GGR, although perhaps at the margin some very small number of premium mass players could migrate to VIP,” the note said.

However, Bernstein Research says the rules may signal further capital controls to come in 2018, which could be a concern for Macau.

“We would continue to caution that the possibility of further capital control restrictions/scrutiny may be forthcoming (although they may not be directed specifically at Macau),” it said.

“While these new policies may create some headwind to GGR in 2018, the bigger concern would be continued clamp downs on capital movement out of China. The most significant headwinds on GGR would occur if there are limits placed on Macau's pawnshop system or greater crackdowns on underground banking channels, for example.”

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