China’s Digital Currency Could Reshape Macau’s Gambling Industry

China’s Digital Currency Could Reshape Macau’s Gambling Industry:

(Bloomberg) Macau saw revenue plummet by $27 billion this year as pandemic travel curbs kept lucrative Chinese gamblers away. While visitors are slowly returning, a potentially bigger threat is unnerving operators in the world’s biggest casino hub: the prospect China’s central bank-backed cryptocurrency, the digital yuan, will be introduced to the enclave.

Though no formal plans have been announced, some junkets — businesses that act as middlemen for Chinese high rollers who make up half the city’s gambling revenue — are exiting the industry or shifting resources elsewhere. They’re saying that the imposition of a traceable, government-linked currency will be the death knell for an industry already hobbled by the virus’s impact and stricter rules around high-stakes gambling over the past few years.

A number of casino operators say they have been approached by Macau’s regulator, the Gaming Inspection and Coordination Bureau, over the past few months to discuss the feasibility of using digital yuan to buy casino chips, which are currently denominated in Hong Kong dollars, according to people familiar with the matter.

Discussions are still at an initial stage and there’s been no final decision on whether to proceed, said the people, who asked not to be identified because they’re not authorized to speak publicly about the discussions.

While it appears that no change is imminent, the suggestion alone has sent shock waves through the territory, especially in the uniquely Macau industry of junkets. These companies arrange private jets and hotel stays, but their key role is to provide credit to Chinese gamblers for betting in Macau’s casinos.

Read the full story on Bloomberg.