Macau expects to criminalize illegal money changers

On October 10, the AL’s second standing committee completed its review of the amended anti-gambling crimes law, reports the Macau Daily Times. MPs could vote on the law as early as October 16 when plenary session resumes.

The new law would increase penalties for illegal gambling and give law enforcement the right to search suspicious gambling dens. It would also be a criminal offense to operate an illegal currency exchange.

In June, Macau’s Ministry of Public Security launched a “high-pressure crackdown” on underground banks. The ministry vowed to “destroy criminal gangs” that help Chinese gamblers evade government controls on capital flight.

Fighting corruption

In an interview in July, Peng Peng, chief executive of the Guangdong Society of Reform, told the South China Morning Post that the crackdown was necessary “to protect China’s financial security, address the problem of corruption and prevent the illicit outflow of funds.”

“While the illegal currency exchange business in Macau may come from the gambling industry, this is the case [become] a very common channel for corruption,” he said.

The stricter law, first proposed in August, would impose prison sentences of up to five years for unlicensed money changers. It would also ban felons from entering city casinos for two to 10 years.

No crime without victims

In a 2023 op-ed in China Daily, lawyers Lei Wun-Kong and Kacee Ting Wong wrote that illegal exchanges are “good at finding innovative ways to navigate the wild criminal seas.”

The illegal exchanges offer better exchange rates than licensed money changers and banks and do not limit the amount of exchange. For years, the team wrote, such transactions were considered “victimless petty crimes.” The Financial System Act responded with a slap on the wrist. Violators were fined and the violation was publicized in local media.

But tougher sanctions seemed inevitable. The exchanges are increasingly linked to fraud, money laundering, loan sharking and violent crimes such as kidnapping and murder. Officials add that overall they have led to more crime in Macau and “severely affected social stability.”

Additionally, money changers have been known to take advantage of hapless gamblers in pursuit of their losses.

“Allowing desperate gamblers to make a comeback is a violation of the responsible gambling policies promoted by the Macau SAR government,” the lawyers wrote.