Bernstein assesses taxation in Macau

The brokerage warned about a potential tax increase for casino operators in Macau after concessions get renewed but said it is “unlikely”.

Macau.- Casino operators are facing a concession renewal process in Macau and potential tax raises are the top concerns for every company. However, according to Bernstein Research, such a risk is “unlikely” as Macanese taxation is the highest in Asia but didn’t rule out the introduction of a profit or dividend tax.

In a note, Bernstein addressed the top five concerns investors had brought up over the latest shows and explained the trade war between the US and China topped them all as concession renewals are soon to happen. The firm said it would be extremely difficult for the Macanese government to take away licences. Analysts highlighted that a licence applies only to the casino floor and equipment, while operators would keep control over the rest of the property should they lose gaming rights in the region.

Bernstein Research also expects the authorities to require more non-gaming investment either in Macau or Hengqin as a way to get some sort of return for renewals.

Among industry’s concerns, the current downturn and its differences with a similar decrease between from 2014 to 2016 were also popular, alongside smoking prohibition.