Macau, one of the largest gaming hubs worldwide, keeps the door closed to cryptocurrency gaming because of security risks involving cryptocurrencies.
Macau’s regulating body still has no plans for regulating the use of cryptocurrency in casinos located in Asia’s largest gambling hub. The state of regulated cryptocurrency gaming in Macau was made clear by Paulo Martins Chan, director of the Gaming Inspection and Co-ordination Bureau, during an interview at this year’s G2E Asia conference.
“There have been no cryptocurrencies accepted in casinos and these products have not been officially introduced in Macau. […] We put a focus on financial security and from our knowledge, the Macao Monetary Authority (AMCM) also does not encourage the use or products in the market, especially in the gaming sector. We haven’t authorised any cryptocurrency related product.”
Legal Status of Cryptocurrency in Macau
Private transactions of Bitcoin and altcoins are neither legal nor illegal in Macau. But it is illegal for banks or payment service providers, however, to be involved in cryptocurrency, whether directly or indirectly. According to the Monetary Authority of Macau (AMCM), cryptocurrency is a ‘virtual commodity,’ not a legal currency or a financial instrument in the country.
The current legal state of cryptocurrency in Macau comes after the revelation of the Macau Dragon Group’s ties to criminal groups last April this year. The firm associated with Wan Kuokoi, a Chinese gangster who spent more than 10 years in prison for committing various crimes, had lead the 14K triad group in Macau.
After the revelation of the Macau Dragon Group, the AMCM warned Macau’s residents of the firm’s ties to criminals. The regulation body released a statement that said:
“The media has reported that a Macau company was involved in an Initial Coin Offering (ICO) recently. The Monetary Authority of Macau reminds all Macau residents that cryptocurrencies are virtual products, but not legal currencies or financial tools. Residents should be aware of fraud and criminal activities associated with cryptocurrencies.”
The firm is responsible for creating the Dragon Coin, an ERC20 token that allows players to transact with partnered casino and junkets in Macau. But Macau Judiciary Police said there were no junkets within Macau that have worked with the firm nor accept Dragon Coin.
Future of Macau’s Cryptocurrency Gaming Industry
Steve Pang, founder of Macau Quantum Gold Blockchain Technology Limited, said that Macau is the best place in China for crypto companies.
In an interview with the Macau News Agency in April, Pang said:
“There are other more cryptocurrency-friendly countries in the world like Singapore or Switzerland, but we wanted the company to be registered in China. After evaluating Mainland China, Hong Kong, Taiwan and Macau, we decided Macau was the most cryptocurrency-friendly jurisdiction.”
It is important to note that there are no legislations that criminalize crypto companies for operating in Macau. These companies will not have the support of banks and financial institutions.
But there are still legal risks involved for cryptocurrency companies in Macau. Last month, Macau’s Judiciary Police arrested a resident who was selling cryptocurrencies. The potential legal issues have made Pang reluctant to have his firm as the first cryptocurrency company in Macau.
While Macau remains hesitant to legalize cryptocurrency gaming, other Asian countries have taken initiative in the blockchain space. Singapore and Hong Kong are a safe haven for Chinese companies forced to relocate after Beijing made ICO illegal. Only time will tell if other Asian countries can influence Macau to reconsider its stance on cryptocurrency and its use on gaming sites.