Macau tax revenues in decline
Macau tax revenues have sharply declined as a result of the coronavirus’ impact on the casino sector, but Secretary for Economy and Finance Lei Wai Nong said the government is not considering any tax breaks for the industry.
Calvin Ayre reports that as part of his statement, the secretary indicated that local revenue earned from taxes on casino operations through the first two months of this year fell to a record deficit exceeding $4.9 billion.
This shortfall was a direct result of the casino concessionaires having little to no business, due to Covid-19.
The local government recorded a tax surplus of $6.42 billion in 2019, with $10.26 billion in expenses and $16.61 billion in revenue.
Gaming taxes contributed the largest share of this total at $14.08 billion.
Those numbers look like a dream now, as the coronavirus led to a 15-day shutdown of casino operations during February.
January, which already brought some virus-related volume declines, saw gross gaming revenue drop by 11.3 per cent in comparison to the same time in 2019.
Overall, gaming revenue reached $2.76 billion with the government collecting tax revenues of $1.1 billion.
Those were gaudy numbers compared to February, however when total revenue fell by 87.8 per cent from February 2019.
That gave total revenue of $390 million with gaming tax revenues reaching negligible numbers.
Lei noted that the government still has no plans to relieve its tax burden on operators.
“For now, we do not intend to introduce any tax changes.”
Lei is the official responsible for direct oversight of the casino industry.
He explained that the only way that tax breaks would occur is after a thorough review of Macau’s gaming laws.
At least as of last week, Lei noted the city’s casino operators had no asked for tax breaks, but he didn’t confirm that this was still true as of Thursday’s press conference.
However, Francis Lui Yiu Tung, vice chairman at Macau casino operator Galaxy Entertainment Group, suggested he believes something is in the works.
“At present, we have not asked the Macau government for any tax concessions but we believe the government is already introducing a series of measures for the community of Macau,” he said in late February.
Currently, some analysts believe that Macau can recover by the third quarter of this year, but it would take a lifting of restrictions on travel imposed by China and other regional governments.
Until the pandemic is contained, those restrictions are likely to stay in effect.
Macau casinos reopen
Nearly all Macau casinos have reopened their doors following the coronavirus-related shutdown.
Calvin Ayre reported earlier this month that the casinos don’t expect business to be back to normal for many months to come.
On Monday, four more Macau casinos resumed their gaming operations, making 33 of the gaming hub’s 39 casinos that have launched phased re-openings, following the end of the government-ordered 15-day shutdown last Thursday.
GGR Asia quoted Macau’s Gaming Inspection and Coordination Bureau saying Melco Resorts & Entertainment’s Altira Macau, the Grand Dragon Casino on Taipa, the Waldo Hotel and Hotel President had all resumed gaming operations on Monday.
Sands China’s Sands Cotai Central is expected to open its gaming floors on Thursday.
As a condition of re-opening, the DICJ imposed new restrictions on casino operations, including requiring all guests and casino staff to wear face masks, limiting the number of players at a gaming table and not allowing “standing bets”.
However, the DICJ’s head of inspection Joe Vong said Sunday that the regulator had received complaints from both staff and the public regarding some casinos allowing a high concentration of players at tables.
Vong reminded operators of the DICJ’s guidelines and warned that inspections were being conducted daily to ensure compliance.
Other complaints involved one unidentified casino concessionaire who failed to provide staff with masks, but Vong said the situation had been resolved following the DICJ’s intervention.
Another complaint involved a casino that failed to disinfect its gaming chips, which Vong said was due to a shortage of cleaning supplies, but that has since been remedied.
Regardless of the forward progress, analysts expect February’s gross gaming revenue to fall as much as 90 per cent year-on-year, while the decline for March could fall by 80 per cent if Beijing opts not to lift the current restrictions on individual visit schemes and group visas to Macau.