Macau sees drop in gaming tax in first four months

Macau has been struggling to collect decent revenue from its gaming taxes of late. An increase in the COVID-19 cases on the mainland and a broader crackdown on people traveling to Macau and abroad to gamble has had an adverse effect. As a result, the special administrative region reported MOP1.48 billion or ($183) gambling revenue from operators in April. This constituted a massive 53.9% drop year-over-year.

All of this is a continuation of the slow start of the year that Macau had. The Golden Weekholiday was expected to bring back travelers, but visitation remained fairly subdued. While some analysts are expecting Macau to cope much better in the future, present results are depressing. The SAR has already figured out most of the proposed changes in its gambling laws which is some sign of relief at the very least, as it will give concessionaires a clear model of operation.

Among those changes are a proposal to stop relying on Chinese gamblers and start looking for travelers everywhere. Tax revenue for March was also rather subdued. It stood at MOP3 billion or $371 million, but still better than the numbers posted in April.

In terms of results for the first four months of the year, tax revenue stood at MOP10.21 billion or $1.26 billion. This is down from the year-over-year results which were MOP12.38 billion or $1.53 billion. Even though Macau’s gaming taxes are fairly high, with a special gaming tax worth 35% being paid to the government, and another 4% contributed to the SAR’s cultural, economic, and social activities, the realities of subdued travel have had their impact on the administrative region.

Meanwhile, the Legislative Assembly is pushing ahead with changes in the way gambling laws in the SAR work. Most recently, lawmakers agreed that should a casino concessionaire be found unfit to run gambling activities in the SAR, all employees would be dismissed "without cause" immediately.

Junket operators have already taken a big hit and they are unlikely to make a full return. Casinos will have to seek alternative ways to attract visitors and bolster their revenue.

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