Macau assumes greater control over casino GGR

More changes are on the way in Macau’s gambling re-regulation which will see the special administrative region significantly change the makeup of one of its main economic activities. Now, the Macau government will have a say in the minimum gross gaming revenue (GGR) requirement in the special administrative region and effectively determine the rate at which casino concessionaires are being charged.

This comes as part of the ongoing discussions spearheaded by the Second Standing Committee of the Macau Legislative Assembly, which has allocated significant effort and resources to ensuring the fairness of the industry re-regulation and a positive outcome for the country’s new Gaming Law.

The government will now have exclusive right into looking in with concessionaires GGR which will find themselves under more pressure to reach pre-agreed targets. For example, if a casino fails to hit the GGR target, then the government would collect a special premium lump payment. The minimum income target will be based on per-slot and table games.

These changes will be enacted in the context of broader economic conditions in Macau, which means that the government may not be looking to disadvantage casinos financially, but rather enable the government to collect more or less tax revenue based on what is currently going on in the SAR.

For example, if another pandemic occurs, and all concessionaires see their businesses shuttered for another two years, the government may adjust the tax rate collected under a special "force majeure" clause that will protect concessionaire interests as well. Having more control over the companies’ gross gaming revenue is a new idea that should enable Macau to collect more tax.

It should also give concessionaires a very strong incentive to attract more gamblers. Macau has already confirmed that concessionaires are encouraged to seek and bring more gamblers from abroad. However, junket operators who target Chinese gamers will have to hold their horses. Effectively, Macau and China do not want to see the SAR rely too heavily on Chinese tourists and gamblers making it through the border to gamble.

Another change that was discussed was in the case a concessionaire loses their right to operate a property, they must make sure that the property is prepared for use by any next company in line that may win a bid to run casino operations out of it. Macau has been caught in a feverish re-regulation of its gambling laws with many similar changes coming to light over the last few days.

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