Hong Kong-based gaming company Dragon Corporation is attempting to raise more than $400 million to construct a floating cryptocurrency casino in Macau. The token sale was open for investors in “most countries except the United States, mainland China, and Singapore.”
The company, led by Chakrit Ahmad, sees the potential of Macau as an independent and autonomous territory known for its luxurious resorts, lavish casinos and which lies connected to mainland China.
Hefty transaction fees
As gambling is illegal in China, Macau provides a convenient destination for the hordes of Chinese gamblers who continue to flock to the territory to place a bet. China prevents its nationals from taking their currency out of the country, and they must go through a complicated process to get their RMB into Macau.
Chinese gamblers usually have to pay a junket company which provides the chips to play in the casinos. When they are ready to leave, they can cash out their chips with the same company and be reimbursed the corresponding amount of money. However, these companies come at a hefty price, charging a 5% transaction fee during both deposit and withdrawal processes. Paying this type of a transaction fee is not ideal for Chinese gamblers but remains their only choice if they want to gamble legally in Macau.
Dragon Corp’s ICO
Dragon Corp aims to enter this market as a digital junket company and one which uses cryptocurrency to gain a competitive advantage. The casino/junket market, estimated USD 17 billion, is staked in the largest junket company SinCity Group alone. The institution aims to leverage the low price of blockchain transactions and able to offer Chinese gamblers transactions fees of only 0.5%. Dragon Corp’s ICO will partly fund the casino’s construction - expected to cost in the region of USD 300 million and will make its way to Macau by 2019. However, unlike your average casino construction project, investors aren’t purchasing a stake in the casino but rather the chance to buy tokens for use as non-negotiable gambling chips in the casino.
Blockchain on Macau's casino floors
Macau’s gambling market is booming, and the idea to fund a floating crypto casino in an ICO is seen to be a legitimate idea. Las Vegas has long been considered to be the world’s number one gambling destination; however, Macau has been much more prolific recently. The territory generates approximately six times the revenue generated by the iconic American gambling destination, with some estimates projecting much more.
It is expected that the ICO will be scrutinized by the Chinese regulators who recently halted activities that involved the sale of digital tokens. However, Dragon Corp does not expect the ICO to be affected by the Chinese imposed a ban because its tokens are issued in Hong Kong where tokens are classified as a “virtual commodity” and not subject to regulation.
China is adamant about forbidding any form of gambling in mainland China, although blockchain technology seems to overlook it. With initiatives like this and the rise of Bitcoin and Smart Contract Casino’s, built on Ethereum’s blockchain platform, law enforcement will become more and more difficult. Decentralized applications, or dApps, might be able to finally start breaking down the Great Firewall of China.