(Adds paragraphs 9 and 10 with share movement of U.S-based Macau gaming operators, updates paragraph 8 to close of trading)
By Farah Master
HONG KONG, May 8 (Reuters) - Macau officials and China's state-backed payment card network have cracked down on the use of bogus transactions to circumvent China's exchange controls for gambling in the territory.
The crackdown follows a Reuters special report in March that highlighted the illegal use of UnionPay cards to obtain cash through fake purchases of goods in Macau to evade China's strict currency-export controls.
Shanghai-based UnionPay told Reuters on Thursday that the company had stepped up control measures following a recent field inspection in Macau with Macau government officials.
Measures included targeting cross-border point-of-sale machines (POS) used by touts on Macau casino floors to help gamblers access cash from UnionPay credit cards.
Non-registered Macau mobile point-of-sale terminals brought in from China have proliferated in Macau over the past year, with agents blatantly offering mainland customers the option to get local patacas on the mass halls of the glitzy casino floors.
"We have fully implemented a series of stringent risk prevention measures, including shutting down high-risk merchants and closely monitoring abnormally large transactions."
Shares in Macau gaming companies on the Hong Kong stock exchange plummeted on news of the crackdown, despite strong gaming revenue growth seen in the first week of May thanks to a national holiday.
Galaxy entertainment closed down 7.6 percent, MGM China closed down 8.2 percent, Sands China closed down 4.6 percent, Melco Crown closed down 6.9 percent, and Wynn Macau closed 8.5 percent lower.
The U.S.-listed stocks of the gaming operators also fell in early trading.
Las Vegas Sands Corp shares fell more than 6 percent, MGM Resorts International shares were more than 5 percent lower. Shares of Wynn Resorts Ltd and Melco Crown shed more than 3 percent.
While Chinese nationals are only allowed to take a daily limit of 20,000 yuan, or $3,200, out of China in cash, gamblers routinely get around this by purchasing items from one of Macau's 180 pawnshops or jewellery stores using UnionPay and getting cash back. Often no item has to be purchased with store clerks describing the transaction as a "general sale."
Traditionally Macau has earned over 70-80 percent of its total revenues from wealthy "whale" gamblers who wager a minimum of 1 million yuan per bet. Over the past two years, though, growth in the high-roller segment has been overtaken by a super-charged increase in "mass market" visitors who rely on methods such as phoney UnionPay transactions to access extra cash for gambling.
There has been increased scrutiny on Macau by China's leaders after a series of scandals. Earlier in May, state broadcaster CCTV aired an expose of the popular method of entering Hong Kong and Macau by obtaining a transit visa that allows visitors to stay in Macau for a maximum of seven days upon entry.
Circumvention of the system, whereby visitors stay and gamble in Macau, has been happening for over a decade, but analysts say the CCTV show may suggest tightening measures on visas may be imposed, as well as the crackdown on exchange control violations. (Additional reporting by Siddharth Cavale; Editing by Eric Meijer and Savio D'Souza)