In a world where global gaming enthusiasts are always in search of the perfect avenue to transfer their funds seamlessly, Chinese bettors face a unique challenge due to stringent capital outflow measures. However, they are not limited to illegal options when it comes to moving their money. Gaming veteran Ben Lee sheds light on various avenues Chinese players use to get their funds from one location to another.
Rolling Chips: A Casino-Linked Option One direct casino-linked avenue is the purchase of rolling chips. Lee highlights one Macau operator that had an overseas office exchanging rolling chips for cash abroad. This allowed players to achieve nearly a 98 percent return on their money in Macau.
Cash Deposits: A Cross-Jurisdictional Approach Casino operators with multiple establishments are willing to accept cash deposits in one jurisdiction and provide markers in another. This means that a punter in Macau could deposit funds and then have a marker made available for them in destinations like Vegas or Singapore, and vice versa. While this method goes against banking laws, it’s disguised as “book entries” to justify the outflow on paper.
Real Estate: A Share-Based Strategy The real estate avenue, particularly in Hong Kong, involves properties owned by companies and individuals acquiring shares in these companies to avoid stamp duty. This strategy can be repeated multiple times, boosting property values by selling company shares among those seeking to transfer funds.
Pooling Annual Outward Transfers: A Middle-Class Strategy A less sophisticated approach is to pool the annual $50,000 outward transfer limit allowed for family members and friends. These pooled funds are then used to buy properties overseas, such as in Australia.
Shanghai United Assets and Equity Exchange: Legitimate Overseas Transfers The Shanghai United Assets and Equity Exchange, originally established for Chinese SOEs to sell domestic assets, now lists overseas assets, including properties. This enables Chinese individuals to move money overseas legitimately by listing a property on the exchange and having others bid on it.
Art and Film: Alternative Avenues for Wealth Transfer Auction houses like Christie’s and Sotheby’s facilitate money transfers through the purchase of assets, such as art. These assets can also be resold at inflated values, further enhancing inconspicuous fund transfers. Some junket operators diversify their holdings by funding international films, allowing for substantial fund transfers with limited scrutiny.
While these avenues are often utilized by the wealthy, middle-class Chinese employ long-term strategies like life insurance, which provides access to funds in foreign countries when specific thresholds are met. Additionally, UnionPay, despite its notoriety, remains a conduit for fund transfers, with transactions appearing as local mainland activities rather than cross-border.
Illegal UnionPay touts fill the liquidity gap in Macau, utilizing mobile POS terminals and cell phones to process transactions as local mainland activities, transferring millions in funds without raising red flags. Despite crackdowns, this practice endures, albeit with risk.
For those seeking a more traditional approach, cash in suitcases transported via private jets remains an option. Cash is heavy, leading some to opt for alternative commodities like gold and diamonds, which are easily transportable. Jewelry brands like Chow Tai Fook also participate in the gaming industry.
Certificates entitling holders to a percentage of a company’s gold holdings offer another avenue, with withdrawals available at any of the company’s outlets worldwide. Physical properties can also be redeemed at these outlets, allowing punters to purchase items in one location and sell them overseas.
Similar to junkets, underground banking systems facilitate cash deposits with agents in one country, providing cash in another for a fee. Auctions play a role in this scenario, as cash offers attract less scrutiny, enabling proxy purchasing of properties in foreign destinations.
The challenge for Chinese authorities lies in their efforts to curb capital outflows amidst this complex web of fund transfer avenues. Affiliate marketers also contribute to this intricate landscape, using thousands of social media accounts with linked payment options to facilitate payments for online casino gambling.
As the virtual game of whack-a-mole continues, one thing is certain: the flow of funds remains resilient, and Chinese punters will continue to explore innovative avenues to move their money across borders.
