MACAU, China, Sept. 26 (UPI) -- Junkets by wealthy Chinese gamblers to casinos in Macau have been severely reduced by China's anti-corruption crackdown.
Macau, ceded back to China from Portugal 15 years ago, relies on casinos as the driving force of its economy. With seven times the revenue of Las Vegas, business has slowed noticeably because of an anti-corruption initiative causing rich Chinese to stay home, adopt a lower profile and cease flaunting their cash.
The value of shares in Macau's six licensed casinos -- Sands China, Wynn Macau, Melco Crown, SJM, Galaxy and MGM China -- has fallen by 27 to 38 percent this year.
"The ferocity of the anti-corruption drive has scared a lot of people," said one unidentified casino executive.
Although China limits the amount of money citizens can take out of the country, Macau casinos freely offer credit. When payments need to be made back in China, a country that does not enforce gambling debts, Macau's casinos serve as alternative banks, "a specialized form of shadow banking. I can't think of an industry that's directly comparable," says Hong Kong economist Stephen Green.
Two-thirds of Macau's gambling revenue, $30 billion, comes from junkets of Chinese high-rollers.
"The trickle-down effect is that some of the big players have decided that it is not going to be good to be seen playing in Macau," says David Green of Newpage Consulting.