Analysts expect increase in gaming taxes in Macau
A panel of analysts and gaming experts have discussed the possibility of an increase in gaming taxes in Macau if the government’s proposed changes to gaming laws are approved.
Macau.- A panel of gaming analysts, academics and lawyers has predicted there could be an increase in gaming taxes in Macau due to the shortfall in VIP revenue. The discussion came during The Macau Business and Rui Cunha Foundation’s online conference to discuss the revision of the Macau’s gaming laws.
Ben Lee, managing partner of iGamiX Management & Consulting, has previously said Macau could lose 80 per cent of its premium mass business due to the possibility of increased oversight of gaming concessionaires and junket operations.
Alidad Tash, gaming analyst and former gaming executive, said: “I genuinely do not believe the government is going to keep the gaming tax at 34+5 per cent, or 39 per cent.
“I think it’s likely that they will increase it gradually, 2-5 per cent, over a few years, or they will go ahead to take care of that shortfall… as the junkets are basically, slowly diminishing as time goes by.”
Tash also noted VIP gaming revenue in 2013 represented nearly 70 per cent of Macau’s GGR while in 2019 it only reached 40 per cent of the total figure.
Carlos Siu, an associate professor from the Centre for Gaming and Tourism Studies of Macau Polytechnic Institute, said that in order to accomplish a balanced budget at the current duty rate, Macau’s annual gaming revenue would need to average MOP200bn a year. In 2020 GGR reached just MOP60.4bn due to the Covid-19 pandemic.
In September, Morgan Stanley lowered its forecast for Macau’s GGR for 2021 due to the zero-tolerance policy towards Covid-19 in both mainland China and Macau. According to analysts, Macau’s GGR will reach MOP96.77bn (US$12bn), 33 per cent of that seen in 2019.
Junkets request details on Macau’s proposed new gaming laws
Kwok Chi Chung, president of the Macau Association of Gaming and Entertainment Promoters, has asked the government for more clarity.
Kwok said he has doubts about the proposals regarding the VIP junket segment and said junkets need clarity on what constitutes an illegal deposit. According to the proposal, people convicted of making illegal deposits will face up to five years in prison.
The junket industry in Macau has shrunk over the past eight years. Industry analysts said that travel restrictions related to the Covid-19 pandemic and China’s criminalisation of the organisation of “overseas gambling” have exacerbated the unfavourable factors that affected the industry.
In Q3, VIP baccarat was down 29.9 per cent quarter-on-quarter, representing 32 per cent of total GGR.
