China Unveils Blacklist of Foreign Casinos, Will Impose Travel Restrictions
Posted on: August 26, 2020, 03:01h.
Last updated on: August 27, 2020, 01:42h.
China says it will soon publish a blacklist of foreign casinos that routinely target high rollers in the People’s Republic, and ban its citizens from traveling to those destinations.
China’s Ministry of Culture and Tourism said Wednesday that it, along with other government agencies, has established a blacklist of casinos in overseas cities that market to Chinese tourists.
Nearly all forms of gambling are illegal in the mainland People’s Republic, the exception being the state-run lottery. Commercial casinos are found only in Macau, an autonomous Special Administrative Region (SAR) of China.
Casinos in overseas cities attract Chinese tourists to go abroad for gambling activities, disrupting the order of China’s outbound tourism market, and endangering the personal and property safety of Chinese citizens,” a ministry notice explained.
China was mum on divulging which casinos and areas are on the blacklist. The ministry did say it would include casinos that allow proxy betting — the process of a gambler making bets on behalf of a person who is directing their play remotely via telephone or another device.
VIP junket groups, which coordinate travel from China to casino destinations for high rollers and lend them money to gamble with, are additionally being closely monitored by the central government.
Positive for Macau
Gaming analysts were quick to chime in on the blacklist news.
“At this stage, it’s difficult to know exactly how the government will clamp down and what it means by ‘blacklisting.’ But we suspect capital flows through underground banks and agents, as well as junkets’ promotion of these overseas markets, will be heavily scrutinized,” opined a note from JP Morgan analysts DS Kim, Derek Choi, and Jeremy An.
Numerous foreign integrated resort markets have long welcomed Chinese nationals to their casinos, including in the Philippines, Australia, Singapore, and Vietnam. Casino companies are barred from advertising their gaming services inside mainland China.
John DeCree of Union Gaming sees the blacklist as a potential win for Macau. Though he, too, says it’s unclear how China could enforce such a blacklist, if it does, the world’s richest gambling hub could be a beneficiary.
“Longer-term, this directive could ultimately be a key positive for Macau, which has experienced a continued contraction of its VIP business in recent years that can be at least partially blamed on demand being diverted to other Asian gaming destinations,” stated DeCree in a note. “If China enforces this directive, it could have the benefit of redirecting VIP volume back to Macau.”
While several countries could be included on the blacklist, the Philippines is a likely front-runner. The southeast Asian nation is home to some 60 licensed internet casino firms, known as Philippine Offshore Gaming Operators (POGOs).
POGOs actively target Chinese gamblers, and their operational hubs are heavily staffed with Chinese people capable of speaking Mandarin. China President Xi Jinping asked Philippines President Rodrigo Duterte to force POGO businesses to stop allowing players from China.
Duterte refused those requests in 2019, saying the associated tax revenue from online gaming is too substantial. Manila is home to four integrated resorts — Okada, City of Dreams, Solaire, and Resorts World.
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