The Judiciary Police in Macau has estimated that the value of retail transactions carried out through unregistered China UnionPay Co Ltd handheld terminals was MOP4.995 billion (US$625.5 million) for the year 2016.
The law enforcement agency had opened 25 investigations into allegations of unregistered terminals being operated in the city. While 20 of these investigations were given to Prosecutions Office for processing, five were dropped due to lack of evidence. Based on their investigations, the police identified 53 individuals as suspects in the cases. Out of this number, 38 were from mainland China while 14 were from Macau and 1 from Hong Kong.
In a statement, the Justice Police said,
In recent years, several pawnshops and jewelry shops here have used the [modified] mainland Chinese UnionPay POS units to offer clients access to cash withdrawal services, with the aim of lowering their own operation costs and enhancing profitsFrom what we understood, the money that these clients withdrew [via modified POS units] was mostly for gambling.
The police did not reveal any details of the number of machines seized. The machines were tampered with so that UnionPay’s network recognizes them as being operated in mainland China rather than in Macau. Transaction fees are lower in mainland China than in Macau. Gross gaming revenue for Macau in 2016 was roughly around $27.9 billion making the illegal $626-million transactions account for 2.2 percent of this revenue.
The value of transactions on such machines in 2015 was MOP1.22 billion according to a media report from Portuguese news agency Lusa. In a follow up report, the agency said that the transaction value in the first half of 2016, was MOP2.1 billion.
The Judiciary Police and Monetary Authority of Macau conducted several joint raids on establishments suspected to have been operating the illegal terminals on January 5. Around 23 people were arrested for having carried out computer fraud and for organized crime. In one of the shops raided, officials found an underground workshop that contained tools to tamper with the equipment which might have been smuggled out of the mainland.
In order to clampdown on capital flight, Chinese authorities have put in stringent rules for the amount of currency mainland visitors can carry to Macau. Current rules restrict them to holding only RMB20,000 (US$2,985) in cash as the daily limit. Typically gamblers have circumvented such rules by buying items from pawnshops in the city and returning them immediately for cash, paying a commission to the shops for this service.