Illegal UnionPay transactions low risk to Macau GGR; Union Gaming

The release of transaction data around illegal UnionPay transactions made in Macau in 2015, does not pose a high risk to gross gambling revenue, a Union Gaming report says.

“When compared to GGR, illegal UnionPay transactions amount to notably less than 1% (although likely in the low single digits when assuming that the figures herein only represent the illegal transactions that were actually discovered).”

Illegal UnionPay transactions made in 2015 totalled MOP1.2 billion (US $153 million), up 56 percent from MOP 784 million in 2014. In this case, illegal transactions were defined as the use of portable UnionPay terminals to disguise the transaction as occurring on the mainland, which also saved the operators of the portable terminals transaction fees.

However, even in a worst-case scenario, where as much as 20 percent of premium mass play disappears as a result of incremental UnionPay restrictions, Union Gaming predicts the impact would be no more than a three percent hit to EBITDA.

“We do not buy into the doom and gloom scenario that there will be a wholesale stoppage of UnionPay as a means to get cash while in Macau. Regardless, we ran the numbers again and believe that the high-end of UnionPay risk is probably less than 2% to GGR and less than 3% to EBITDA:”