Macau lawmakers to vote on bill criminalising illegal money exchange

On 10 October, the AL’s second standing committee concluded its review of the amended Law on Combating Gambling Crimes, reports the Macau Daily Times. Lawmakers could vote on the legislation as early as 16 October, when the plenary session resumes.

The new law would increase penalties for illegal gambling and give law enforcement the right to search suspected gambling dens. It would also make it a crime to operate an illegal money exchange.

In June, Macau’s ministry of public security launched a “high-pressure crackdown” on the underground banks. The ministry pledged to “destroy criminal gangs” that help Chinese gamblers sidestep government controls on capital flight.

Tackling corruption

In a July interview, Peng Peng, executive chairman of the Guangdong Society of Reform, told the South China Morning Post the crackdown was necessary “to protect China’s financial security, tackle the problem of corruption and prevent the illegal outflow of money”.

“While the illegal money exchange business in Macau might have stemmed from the gambling industry, it has [become] a very common channel for corruption,” he said.

The tougher law, first proposed in August, includes prison terms of up to five years for unlicensed money changers. In addition, it would ban offenders from entering city casinos for between two and 10 years.

Not a victimless crime

In a 2023 commentary in the China Daily, attorneys 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 rates than licensed money-changers and banks and do not limit the amount to be exchanged. For years, the team wrote, such transactions were considered “victimless minor offences”. The Financial System Act responded with a slap on the wrist. Violators were fined and the offence was published in local media.

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

Moreover, the money-changers are known to prey on unlucky gamblers chasing their losses.

This is something that enables “desperate gamblers to stage a comeback” and “constitutes a violation of responsible gambling policies propagated by the Macau SAR government”, the attorneys wrote.