Chinese authorities are pressing Macau to step up scrutiny of money transfers as part of a broader move to combat corruption and promote "responsible gaming" in the casino halls of the world's largest gambling hub.
In recent weeks, Macau's gambling industry has received clear signals that tougher regulation is on its way as China's new leadership makes a priority out of tackling corruption - a blight highlighted by the recent fall from grace of Bo Xilai, a Communist Party high-flyer whose wife was found guilty of murdering a British businessman.
More than half a dozen people operating in the junket business - agents who find and ferry around high-rollers, arranging credit and collecting debts - were detained at US gaming tycoon Steve Wynn's Wynn Macau casino late last month, amid local speculation about links to the disgraced Bo. A spokeswoman for Wynn Macau declined to comment.
As Beijing tightens oversight of civil servants and keeps an ever-closer watch on flamboyant luxury spending, Macau is an obvious focus. The former Portuguese enclave is the only place in China where citizens can legally bet in casinos. A cash cow for local billionaires and US tycoons such as Wynn and Sheldon Adelson, Macau's annual revenue from gaming is expected to hit USD$38 billion this year - six times that of Las Vegas.
"The Chinese government has requested to strengthen the governance of money flows," said Hoffman Ma, deputy chairman of Success Universe Group, which has a joint venture with Macau kingpin Stanley Ho's SJM Holdings to operate the Ponte 16 casino. "They don't want to take away from Macau, they want to control it more and alert people, telling them to behave."
Ma said some Chinese bank accounts have been frozen over suspect money transfers to Hong Kong. China imposes strict limits on how much money - USD$50,000 - its citizens can take out of the country, making Macau a valve for hot money escaping the world's second-largest economy.
Net outflows surged ahead of last month's leadership change, and reports have highlighted this year how many Chinese officials, including one Agricultural Bank of China executive, have racked up big gambling debts.
Macau has always been subject to tight oversight from the mainland, but measures have been stepped up in the second half of this year, say industry executives.
Updated internal guidelines have been distributed to Macau's VIP or junket operators - a main conduit for siphoning money out of the mainland. The guidelines, circulated by the Macau Gaming Inspection and Coordination bureau on November 8, require junket operators to report accurate monthly lists of players, including details of when plays were made and how much was won or lost.
Transaction codes, for money both flowing in and out, on sums exceeding USD$500,000 have to be reported within 24 hours, and the granting of gaming credit must be reported consistently and clearly identify the relationship of all the names on the documents. The moves are in line with a broader policing of money flows after anti-money laundering standards were tightened in Hong Kong in April.
Beijing doesn't want Macau's gaming revenue to grow at a faster rate than China's GDP - currently growing at below 8 percent a year - said Tony Tong, director of strategic investment at Tak Chun Finance Group, an affiliate of one of Macau's biggest junket operators. Faster growth than GDP could be viewed as overheating, he said.
Beijing-based Su Guojin, the first lottery expert nominated by the China Ministry of Civil Affairs, said the Chinese government wants to see Macau diversify away from gambling and earn more from leisure and tourism. Gambling accounts for more than 40 percent of Macau's GDP.
"Diversification doesn't mean total profit will fall. The proportion of non-gaming just needs to be changed," said Su. "You bring Lady Gaga, and you'll attract visitors."
Macau's non-gaming revenues from areas such as dining and entertainment make up less than 5 percent of the total, compared to more than half in Las Vegas. Yet revenue from mass market gamblers, drawn from China's expansive middle-class, continues to grow substantially - a market that is more profitable for casino operators as they don't need to pay commission to the junket middlemen.
New properties being built on Macau's Cotai strip already incorporate luxury spas, high-end retail and Michelin dining to attract a different clientele - a far cry from a decade ago when gangster Wan "Broken Tooth" Kuok-koi and triads controlled much of a seedy gaming hall industry.
Released from a 15-year jail term on Saturday, Wan told local media: "I don't want to do anything to affect the stability of Macau."