Macau Casinos Paid $5.84 Billion Tax in 2021
The Macau local government received $5.84 billion in gaming tax last year. The huge sum of money stems from all Macau casinos and the six licensees that operate them Macau’s Financial Services Bureau reported tax revenue weighed in at MOP$33.91 billion ($5.84 billion), an increase of 13.8% on 2020’s figures.
SJM Resorts pays tax at a rate of 38% of its gross gaming revenue. This is 1% less than Macau’s other five gaming license holders. SJM Resorts receives a slight discount on the basis of its long history of running Macau casinos.
Macau casinos won a cool $14.96 billion in 2021, which is a huge increase on the $5.12 billion in 2020. Indeed, COVID-19 restrictions hit Macau casinos hard. Although the casinos’ gaming 2021 winnings were substantial, it is a far cry from the $19.39 billion won in 2019.
Macau Government Reliant on Macau Casinos Tax
The special administrative region of China is over-reliant on tax Macau casinos pay. The Macau gaming industry is the largest in the world in terms of annual gaming income. Tax raised from its operation accounts for more than 80% of all tax collected.
Macau’s government budgeted $8.59 billion from gaming in early 2021. However, continued restrictions made that figure look overly ambitious. China’s “zero COVID” policy decimated the number of Macau visitors. China imposed travel and border restrictions throughout 2020 and into 2021. Figures show only 7.7 million people visited Macau in 2021, a mere 20% of the 2019 visitor total. Taxation was never getting near the budgeted amount with such restrictions in place.
According to Macau’s Tourism Office, conditions are improving, albeit slowly. The area’s casinos are open to anyone from mainland China, Hong Kong, and Taiwan, if they have not travelled internationally in the past 21 days. A negative COVID-19 test, taken within the past 24 hours, is required for Hong Kong and Taiwanese visitors. No test is required for mainland China visitors. However, they must wear face coverings.
Uncertainty Continues into 2022
The Macau government expects $8.59 billion of gaming tax in the coming 12 months. However, there is much uncertainty surrounding Macau casinos. First, all six licences expire on June 26. The government hinted at plans to reissue licences to all six companies but with several modifications to the rules.
China’s government is keen to stop Macau casinos from using VIP junket groups. It is unhappy with the flow of capital from mainland China and out of its control. Experts predict a lack of junkets will affect casinos’ revenues. This is because junkets bring in well-heeled gamblers who spend a small fortune per visit.
However, Macau’s six casino operators are not overly worried about a lack of VIPs. The casinos treat the mega-rich to a wide range of perks, not limited to free lavish rooms and heavily discounted dining.
A Threat to National Security
Matters took a bizarre twist before the weekend with comments from Chan Chak Mo. Mr Mo is the president of Macau’s Legislative Assembly which approved the city’s new gambling law reforms. Mo warned of removing a casino’s licence if it is a threat to national security.
Unfortunately, Mr Mo failed to expand on what those words mean. How does a casino become a threat to national security? Perhaps he had junkets on his mind, or being lax with COVID restrictions.
All should become clear in the coming weeks as the Legislative Assembly finalise the new regulations for licensees.
The new rules look like ending satellite casinos sooner rather than later. Satellite casinos are independent venues using one of the main six licence holders’ licences. Success Universe Group is one such satellite. it backs the Ponte 16 resorts that operated using SJM Holdings’ license. These satellites have three years to work out how to align themselves better with licensees.
