Beijing’s new crackdown on UnionPay card abuse could take a toll on Macau’s pawnshops, which would have a spillover effect on the city’s casino gaming industry.

Last week saw China announce a two-pronged attack on illicit use of the UnionPay system. Beijing is taking steps to ensure that all mobile scanning devices are properly registered, while Macau authorities have announced the real-time monitoring of transactions at high-risk merchants, such as pawnshops and high-end jewelry and watch retailers, particularly those adjacent to casinos.

Macau’s pawnshops are infamous for deriving a significant chunk of their business volume through bogus transactions, in which cash advances are disguised as product purchases. Other scams involve the actual purchase of a high-value item via UnionPay, after which the customer returns the items in exchange for cash (minus the merchant’s commission).

Deutsche Bank analyst Karen Tang estimates that such transactions account for between 10% and 15% of all cash accessed by gamblers in Macau. Tang believes this could account for 10% of all VIP gambling activity, and up to 30% of all premium mass activity (high-stakes players who don’t rely on junket operators to provide cash).