News: CWN UPDATE 1-Fears of Beijing gambling crackdown sends casino stocks crashing

• Macau to cut cash UnionPay cardholders can withdraw - SCMP
• Casino stocks from Las Vegas to Sydney and HK tumble
• China clamping down on capital outflows as FX reserves shrink
• UnionPay says no change to policy, will comply with rules

(Adds analyst comment, comment from UnionPay, bulletpoints)

Casino stocks from Australia's Crown Resorts (CWN) to Las Vegas Sands tumbled after a report that Macau, the world's biggest gambling hub, would limit cash withdrawals as part of a Beijing-led crackdown on illicit outflows.

The South China Morning Post, citing a finance industry source, reported late on Thursday that Macau would halve the amount of cash that China UnionPay cardholders can withdraw from automated teller machines (ATMs) in the territory.

The move by the Monetary Authority of Macau would cut daily limit for clients of China's largest provider of bank cards to 5,000 patacas ($626) from 10,000 currently, the newspaper reported. It takes effect from Saturday. (http://bit.ly/2hpKhHI)

The Monetary Authority of Macau said it would issue a statement later, but declined to give any more details.

UnionPay's international arm said on Friday it had made no changes to its policy on overseas cash withdrawals using mainland-issued cards.

It added the daily limit for withdrawals using UnionPay cards overseas would remain at 10,000 yuan ($1,450), with an annual limit still of 100,000 yuan.

"As we have done until now, we will continue to develop our business in line with rules set by domestic and overseas regulators, to ensure the safety and compliance of UnionPay card's cross-border business," the firm said.

The report triggered sharp drops in shares of U.S. and other casino operators, which make much of their profit in Macau and are still recovering from a long-running anti-graft campaign under President Xi Jinping.

Monthly revenues from Macau only returned to growth in August this year and have since posted four months of growth thanks to new resorts bringing in casual gamblers, prompting analysts to call the bottom.

ATM withdrawals are not a major source of cash for most Chinese gamblers, especially VIP players known as high rollers. Many average players have also used UnionPay to purchase goods, then returning them for a cash refund and gambling that. But the new policy is an indication of concern.

Analysts at JP Morgan said the report, if confirmed, could weigh on shares even if it did not have a significant impact on revenues in Macau.

"There might be some indirect impact on player psychology/confidence, as the move could be seen as mainland China potentially and arguably re-engaging its oversight of Macau," JP Morgan said in a note.

CAPITAL OUTFLOW CONCERNS Shares of Melco Crown Entertainment Ltd fell as much as 17 percent, Las Vegas Sands Corp declined 14 percent, Wynn Resorts Ltd fell 12 percent and MGM Resorts International fell 7 percent.

Crown Resorts shares were down over 6 percent at 0114 GMT. MGM China <2282.HK> was down more than 8 percent, while Galaxy Entertainment <0027.HK> was down over 7 percent.

Ric Spooner, chief strategist at CMC Markets in Sydney, said Beijing's anti-corruption drive has turned out not to be the short term window-dressing exercise some had expected.

"The Chinese government has been very consistent about this and continues to do things aimed at limiting the problems of corruption, and that suggests that the lower levels of demand seen in Macau are fairly permanent."

The reported ATM withdrawal limit "is just more evidence that China is serious in its intent on limiting this sort of behaviour", Spooner said.

The role of Beijing-backed UnionPay in facilitating the outflow of funds through Macau has previously been highlighted. A Reuters examination in 2014 showed how tens of billions of dollars was being spirited out of China through fake purchases of jewelry at hundreds of stores and pawnshops around the former Portuguese colony's glitzy casinos. (http://reut.rs/2hlhY15)

Curbs on the daily cash withdrawal limit in Macau come as China steps up measures to stem capital outflows more broadly.

Chinese State Administration of Foreign Exchange (SAFE) has been vetting transfers abroad worth $5 million or more and was increasing scrutiny of major outbound deals, even those with prior approval.

The yuan skidded to more than eight-year lows at the end of November and China's foreign exchange reserves fell far more than expected in the month to $3.05 trillion, the lowest in nearly six years. ($1 = 7.9810 patacas)