Any decision to cut in half the amount of cash China UnionPay card holders can withdraw from ATMs would have only a minor impact on Macau’s gaming industry, according to analysts.
The South China Morning Post reported this week that the Macau Monetary Authority was planning to slash the daily UnionPay ATM withdrawal limit from MOP$10,000 to MOP$5,000 per day in an attempt to limit the amount of money flowing out of China.
It was later revealed that the limit would only impact individual transaction amounts with daily limits remaining unchanged. However, even if the daily limit was to be halved, analysts believe the impact on Macau would be minimal.
“This measure of cutting ATM daily withdrawals per card to MOP5K will impact spending per capita for grind mass and premium mass customers, which has been the key source of strength as visitations have largely been flattish,” said Morgan Stanley’s Praveen Choudhary.
“[However] on spending per capita, customers could still carry cash of RMB20,000 with them and take out another RMB5,000 from an ATM – so total declined from RMB30,000 to RMB25,000 roughly assuming one card only.
“Also there has been no clampdown on how many cards one could carry. Many use credit cards for non-gaming transactions as well as pawning, which has still not been affected.”
Bernstein’s Vitaly Umansky said, “It is likely that the new policy is trying to focus on large scale money movers who are using dozens if not hundreds of cards per day to access cash (we have personally seen this in Macau) and then providing liquidity for junket agents and Premium Mass players and non-gamers who may be seeking to gain foreign currency liquidity.
“It is likely that only a fraction of the ATM withdrawals are tied to amounts over the new limit and an even smaller fraction would wind up as Mass GGR. Our best guesstimate as of now is that up to 10% of Mass GGR and a small portion of VIP may be financed through ATM withdrawals above the newly established limits.
“Many customers who partly relied on larger ATM withdrawals will likely find alternative ways to finance their gaming activity.”
