Macau: 5% commission tax for junkets will harm the industry, sector says

As part of the new junket law, operators are required to pay a monthly tax of 5 per cent on their commissions.

Macau.- The Macau government’s reintroduction of a 5 per cent commission tax on gaming junkets has been heavily criticised by the Macau Association of Gaming and Entertainment Promoters. The association’s president, Kwok Chi Chung, says it will harm the industry.

Kwok Chi Chung told Macau News Agency that the re-imposition of the tax will have a negative impact on junket operators’ earnings amid an already challenging business environment. He said the industry has seen a recovery since the lifting of Covid-19 restrictions in January but that it’s difficult to predict the future as new gaming regulations have just come into effect. 

The new junket law sets a 1.25 per cent cap on commission rates for VIP junkets and requires junket operators to pay a 5 per cent tax on their commissions each month. In December, authorities estimated that this year the government will only collect MOP10m (US$1.25m) in taxes on the commissions that junkets receive from casinos.

According to Morgan Stanley, 15 per cent of January’s gaming revenue came from the VIP segments. Despite a three-fold jump in tourist arrivals during the Chinese New Year Golden Week, the number still only accounted for 38 per cent of the pre-pandemic level.

The number of junket licences has decreased in recent years, with the number of operators licensed to conduct business in Macau falling by 45.9 per cent over the last 12 months from 235 in 2013 to only 36 in January 2022. The number of licensed junkets in Macau has declined for the ninth consecutive year.