Digital coins could dull Macau's bling

HONG KONG: Digital coins could dull Macau's bling. Mobile payments in the territory quintupled in 2020, and China wants to test its new digital currency there too.

That would help watchdogs monitor money flows - and for that reason some gamblers and casinos might hesitate. High-rollers' haunts such as Wynn Resorts and Galaxy Entertainment would be most exposed if regulators take advantage of the technology.

Mainland Chinese tourists, whose bets comprise the backbone of the local economy, are already accustomed to using online payment apps such as Alipay. Covid-19 has also encouraged more consumers to swap physical notes for contactless transactions.

The use of mobile payments in Macau rose by more than 400% to just over 6 billion patacas ($750 million) last year, according to the territory's monetary authority.

Meanwhile, the central bank is tinkering with a digital yuan, and in August, the Ministry of Commerce said it will pilot the new traceable currency in the former Portuguese colony.

Greater transparency could make it easier for officials to track capital movements and conduct anti-corruption investigations in the gambling hub, should the digital coins be used for wagering.

Evasion of personal income tax is the norm in China; only 2% of the population pays, according to one official's estimate reported in the Economist magazine.

So high rollers and the junkets who fund their bets will be wary of any system that allows authorities to follow the money. Casinos have little incentive to force the issue on their customers, and Macau's government is sensitive too.

In December, the local gaming regulator was quick to deny a Bloomberg report that they would trial China's electronic currency at casinos.

Should Beijing try its luck with digital money, Macau must hope that many ordinary Chinese players will still be willing to gamble small amounts even if officials can see what they put on the table, and what they take home.

Fortunately, it's a good time for a flutter on more modest punters.

Big spenders are no longer the biggest earners for Macau; at the end of 2019 the mass market made a greater contribution to the top and bottom lines for the first time.

A wager on less bling bettors may yet prove lucrative.