Posted on: February 21, 2022, 09:48h.
Last updated on: February 21, 2022, 10:03h.
Macau casinos and the six commercial licensees that operate them sent the local government more than $4.2 billion in gaming tax money last year.
Macau’s Financial Services Bureau reports that 2021 taxes levied on gross gaming revenue (GGR) totaled MOP33.91 billion (US$4.22 billion). The casino tax income was 13.8% more last year than in 2020.
Macau casinos won $10.8 billion during the 12 months, a 44% year-over-year improvement but still 70% below the $36.4 billion the same six casino operators won in 2019.
Five of Macau’s six gaming concessionaires are subject to an effective tax rate of 39 percent of their GGR. SJM Resorts is taxed slightly less at 38 percent, the one percent difference afforded to the company due to its long history of running casinos in the Chinese Special Administrative Region (SAR).
Though the 2021 gaming tax money was a substantial rebound on 2020, the revenue still remains far below the roughly $14 billion the enclave government collected in 2019.
Macau runs on casinos, its gaming industry — the world’s richest in terms of annual gaming income prior to the pandemic — accounting for more than 80 cents of every tax dollar collected. Macau officials had hoped 2021 would be a return to normalcy. But China’s “zero COVID” policy resulting in strict lockdowns and business interruptions upon detection of even a handful of new cases impeded such recovery.
Macau in early 2021 budgeted MOP50 billion (US$6.2 billion) from gaming. But as the year progressed, it became increasingly clear that the casinos would come nowhere near that figure.
Overall, GGR was negatively impacted by repeated travel and border entry restrictions. Only 20% of the 2019 visitor volume was experienced in 2021, the total visitor tally last year coming in around 7.7 million travelers.
Conditions are slowly improving. Macau’s Tourism Office says the casino hub is currently open to people coming from anywhere in mainland China, plus Hong Kong and Taiwan, so long as they haven’t traveled internationally within the past 21 days.
Hongkongers and Taiwanese must present a negative COVID-19 test conducted within the past 24 hours. Arrivals from the Guangdong Province must present a negative test conducted within the past 48 hours.
Travelers coming from anywhere else on the mainland can enter Macau without a test. But such visitors must continue to wear face coverings and observe all pandemic-related control measures instituted by businesses or the Macau government.
Macau officials have again budgeted $6.2 billion worth of gaming taxes in 2022. Whether that figure comes to realization is dependent on a slew of lingering matters.
Along with potential business disruptions from COVID-19, Macau’s six casino licenses are set to expire on June 26. The government has hinted that the six companies will receive fresh tenders ahead of that date, but under modified regulations.
Most critical is the doing away of VIP junket groups, at least as they’ve been known in Macau for nearly two decades. In an effort to curb the flow of capital out of mainland control, China has ordered Macau and its casinos to disassociate from the controversial travel organizers.