China is intent on restricting the outflow of people from the mainland to gambling destinations such as Macau. A new set of visa restrictions has kicked in and analysts aren’t too happy with the results.

According to Credit Suisse, the overreaching Chinese government may lead to a 20% reduction in gross gambling revenue for the special administrative region, to begin with. The report was drafted in conjunction with a previous report that at least 90,000 people had been discouraged to leave the country and traveling to a gambling destination, with most of them planning to go to Macau.

Visas Denied, Border Movement Restricted

This comes at a time when the Ministry of Public Security has publicly vowed that it will seek to reduce the number of travelers who leave the country to gamble. The institution will focus on frequent travelers, the most, citing those who travel three or more times a year.

Credit Suisse suspects that the VIP and premium mass players segments in Macau will be the ones that are most severely impacted. Credit Suisse breaks down how industry segments will be impacted by the reduction of travelers and restrictive measures. These restrictions come on top of already complicated border controls with Macau because of COVID-19 cases.

The main tool that the Chinese government uses to restrict gambling in citizens is to bounce their visas which are necessary for leaving the country in the first place.

This process has already impacted Macau’s gambling results, Credit Suisse said in the update and argued that with too many restrictions on the movement of people, the Golden Week Holiday came short of its intended MOP 200 million ($24.78 million) target. Still, the government in Beijing does not see Macau continue to suffer.

That is why it has acted through the local government branches in Macau, suggesting a small reduction in two additional tax levies that casino concessionaires pay. To get these discounts, though, casinos in Macau are urged to start bringing players from abroad. China’s main issue is having too many of its own nationals gamble in Macau.

Overbearing Regulation Impinges on Growth

However, not everyone sees this as a saving grace. Most industry observers argue that visitations from third countries outside of China have been low. Even before the pandemic, Macau depended on the influx of people from the country’s border province. With junket operators also greatly restricted and limited, Macau is unlikely to see rapid improvement, especially when the Chinese government is further restricting the movement of people.

This comes amid calls for Macau to diversify its economy and stop being over-reliant on its gambling industry. A bigger push for tourism has started already with Macau branding itself as a more family-friendly destination and trying to break away from its gambling lineage.