Macau tightens AML rules

Sunday 5th of June 2016

Macau has introduced new anti-money laundering rules for its gaming industry, which have been effective since May 13, local media reports.

The tightened rules come at a time when junkets and casinos are facing increased scrutiny and higher entry requirements in the region.

The new measures include providing “adequate” risk management systems, keeping daily records and hiring compliance officers. The new rules also prevent junkets and casinos conducting business with people using aliases or under anonymity, and casino operators are now obliged to verify and sign any "large sum" transaction report submitted by junkets operating in their facilities.

The new rules is expected to put pressure on the already slumping VIP sector in Macau.

"Casino and junket operators now have to assume more due diligence and operational obligations, and to adopt more pre-emptive measures," said Karen Tang, analyst at Deutsche Bank in Hong Kong quoted by Reuters.

Those most impacted will likely be Galaxy Entertainment, Wynn Macau and SJM Holdings, added Tang.

In a note on Monday, Bernstein said they expect the government to continue tightening regulation of junket operators and the VIP segment. “As a result, government actions are likely to weigh on VIP gaming in the near-term as well as driving consolidation amongst junket operators as smaller junkets are forced out of the market given higher costs of compliance,” said Bernstein.