RAJ REPORT

WHY AQUIS IS NOT GOING TO HAPPEN—-What lies behind China’s clampdown on foreign casinos——–More importantly and not surprisingly, when foreign companies with dollar signs in their eyes use hard-sell techniques seeking access to China’s enormous market, China’s leaders remember that other addictive product thrust upon them by the British in the 19th Century – opium. Like opium, gambling is linked to organised crime, social problems and social disruption. Like opium, gambling causes bankruptcies and generates instability in the wider financial system.

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More importantly and not surprisingly, when foreign companies with dollar signs in their eyes use hard-sell techniques seeking access to China’s enormous market, China’s leaders remember that other addictive product thrust upon them by the British in the 19th Century – opium. Like opium, gambling is linked to organised crime, social problems and social disruption. Like opium, gambling causes bankruptcies and generates instability in the wider financial system.

Further instability in an already shaky financial system is not what the Chinese authorities want. This is the second frontier of China’s war on big gambling – the financial frontier. Here, the battle includes a crack down on Macao’s “junket system” – offering financing options to China’s high-roller patrons – which grew rapidly in the early 21st century until Xi’s recent anti-corruption drive brought that growth to a sudden halt.

It also involves controlling credit and tracking money – most notably through official monitoring of Chinese travelers’ use of UnionPay, the only domestic bank card in mainland China. Gambling revenue in Macau contracted last year for the first time since 2002, plummeting 30% in December alone. The junket system is now on life support after 16% of junkets closed in 2014.

 

 

 

What lies behind China’s clampdown on foreign casinos.

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