Monetary authority will only tackle illicit junket deposits in very specific cases – AMCM

Illicit junket deposits cases need to be assessed on a case by case basis to assess if they fall under the oversight of the Gaming Inspection and Coordination Bureau (DICJ) of the Monetary Authority of Macao (AMCM), the de facto local central bank told Macau News Agency.

In a recent legal review article, former Macau SAR senior government advisor, Antonio Lobo Vilela, warned that a Court of Final Appeal decision on the liability held by Macau gaming operators over activities carried inside casinos by gaming promoters could be a ‘ticking bomb’ for the sector.

According to Vilela, the economic repercussions that the Covid-19 pandemic will bring in the medium-long run, and as Chinese authorities further restrict offshore gambling of their citizens and cross-border capital flows, a new wave of panic run to withdraw deposits held by junkets could have serious impacts to local concessionaires.

The gaming law advisor also criticised the lack of regulatory work and oversight carried out by local authorities to prevent the issue, noting that some of the supervision of such financial activities would also fall under the AMCM purview, however, as of today no public record exists of any action taken by the monetary authority concerning deposits held by gaming promoters.

In a response sent to MNA, the AMCM expressed that pursuant to Article 121 of the Financial System Act enforced in 1993, any person who accepts deposits or other repayable funds from the public, with or without interest, in his own name or that of a third party, without being authorized under the terms of this act or special legislation, shall be liable to imprisonment for a term not exceeding two years. 

“However, whether the acts of the gaming promoters are considered as ‘accepting deposits from the public’ or ‘taking custody of customers’ chips or money’ (the latter is governed by the relevant gaming laws and regulations), it will depend on the context and need to be assessed on a case by case basis,” the AMCM added.

“In the case of any potential contravention of laws and regulations by the gaming promoters that come to the AMCM’s attention, the AMCM will follow up with the relevant regulators and law enforcement agencies, including the DICJ and the Judiciary Police (PJ)”

Under Macau gaming law the reception of funds in deposit or other repayable funds by gaming promoters for a purpose other than the selling of casino gaming chips bought from a casino operator on credit, with or without the payment of interests or with the payment of interests lower than those offered by banks, is deemed illegal.

However, over the years, some gaming promoters will engage in deposit-taking activities, with some junkets distributing high-interest rates in an attempt to raise funds for the extension of credit for gaming.

MNA also inquired Financial Intelligence Office (GIF) concerning its regulatory work over this matter, with the department considering that it would only cooperate with other agencies to delve into the issue if it dell under its purview as a supervisory agency in tackling money laundering and terrorism financing.

“Aside from regular meetings with supervisory agencies to share topics of mutual interests, GIF also extracts statistical data periodically from Suspicious Transaction Reports (STRs) received and provides instructive information such as trends and typologies to the supervisory agencies for their AML/CFT supervision purposes,” the department noted.

According to data provided by GIF, about 54.6 per cent of all 2,224 STRs received in 2020 were submitted by gaming operators, however, the entity did not disclose which reports concerned deposit withdrawals in VIP rooms or held by gaming promoters.

MNA also inquired the DICJ over its oversight and regulatory works in recent years to prevent illicit deposits with gaming promoters but no reply had been provided when this article was published.