The Executive Council of Macau on Friday, announced that all the concessionaires will be required to set up dedicated gaming zones for foreign (non-Chinese) visitors. The new gaming zone will also designated gaming chips in order to determine the revenue earned from the visitors.
The government had previously announced concessionaires might receive a tax break of up to 5% for encouraging overseas visitors, and the move is a part of a new administrative regulation that lays out the guidelines for a potential reduction in the tax rate levied on gross gaming revenues (GGR).
It was disclosed at a news conference on Friday, which was presided over by DICJ Director Adriano Marques Ho, that operators would have to set up special foreigner-only gaming zones and that the tax break would only apply to GGR generated within these zones.
JP Morgan analyst DS Kim was a bit skeptical of the decision. He wrote, “Foreigners probably drove less than 10% of mass GGR before COVID, not many of them will likely want to restrict themselves to ‘foreigner-only zones’ as gamblers typically prefer to move between different tables to find the ‘pattern’ and ‘luck’ they favor.”
“Operators are unlikely to make such space too attractive given low expected returns, so we think it’s safer to model gaming tax rate at close to 40% of GGR, with no meaningful discount/waiver,” he added.
The new regulation regarding dedicated gaming zones is named, “Regulations on the implementation of the reduction on gross gaming revenue of the concessionaire.”
The Executive Council said, “The regulation sets out the factors to be considered for the remission of the gross gaming revenue of concessionaires, the procedures for the remission and the operation of the return and refund of funds.”
“The specific criteria for reduction or waiver of funding based on the concessionaire’s success in developing foreign markets will be announced in the Gazette by the Chief Executive after he has received the advice of the Gaming Commission.”
The regulation is based on Article 22(3) of Macau’s new Gaming Law, which states that the Government may reduce or waive up to 5% of the GGR of a concessionaire if it attracts foreign visitors. The 5% of GGR concerns with a concessionaires’ 2% public fund and a 3% social security contribution to the government every year.
The new regulations will be come into effect from 1 January, 2023.
Meanwhile, Macau Economy and Finance Secretary Lei Wai Nong recently revealed one of the reasons for the government to reissue licenses to its current casino operators. In an interview with Asia Gaming Brief, he said the decision was made to preserve current employment at the group’s numerous casinos and multibillion-dollar integrated resorts.
