A preliminary version of the Macau government’s “mid-term review” of the city’s gaming industry will be ready by the end of next month, Chief Executive Fernando Chui Sai On announced on Wednesday.
“The preliminary work will be concluded by the end of September,” Mr Chui said during a question and answer plenary session at Macau’s Legislative Assembly (pictured).
“We hope to conclude the work by the end of the year,” he added. His comments did not clarify when information on the findings of the mid-term review would be put into the public domain.
Mr Chui told lawmakers the government was planning to conduct a public opinion consultation as part of the mid-term review, “to get the population’s feedback” on the contributions of the gaming sector to Macau.
Macau’s Chief Executive also detailed the topics the mid-term review would cover.
He said: “Regarding the mid-term review of the gaming sector, we will study eight topics, namely: development of the gaming industry; its economic impact on Macau; its impact on small- and medium-sized enterprises; its impact on Macau’s society; the relationship between the gaming and non-gaming sectors; whether gaming operators are complying with the terms in their contracts; the operations of gaming companies; and whether gaming operators are fulfilling their social responsibilities.”
The mid-term review began earlier this year and is being conducted by an unnamed local tertiary education institution.
The Macau government has previously said that how each of Macau’s six gaming operators scores in the review will not have a direct impact on whether or not to renew their concessions, which expire on varying dates between 2020 and 2022. But Secretary for Economy and Finance, Lionel Leong Vai Tac, has admitted that negotiation on the specific terms under which any such renewals might take place would be based on the mid-term review’s conclusions.
During his Wednesday comments, Mr Chui said he remained “prudently optimistic” regarding the development of the city’s gaming industry, despite 14 straight months of casino gross gaming revenue (GGR) decline in Macau measured year-on-year.
He noted that Macau still remained the world’s top casino destination by GGR. Mr Chui added that the city’s gaming sector had already accumulated significant experience and was “highly competitive” by international standards.
Macau’s Chief Executive also pointed that there were currently several “international level” casino resorts under construction in the Cotai district.
Mr Chui said Macau’s gaming industry had now entered a “more stable stage”, with monthly GGR averaging MOP20 billion (US$2.5 billion). But he warned: “We cannot enjoy growth every month.”
Mr Chui again stated that the Macau government would introduce previously flagged austerity measures to control spending if the city’s average monthly GGR dropped below the MOP20-billion threshold used to prepare the revised 2015 budget.
“If there are new changes, we will introduce contingency measures. First, we will introduce austerity measures to reduce public spending, but without impacting social grants,” Mr Chui said.
The gaming industry is the major source of Macau’s fiscal revenues. The government levies an effective tax rate of 39 percent on casino GGR – 35 percent in direct government tax, and the remainder in a number of levies to pay for a range of community good causes.
The Macau government fiscal surplus was down by 58.3 percent year-on-year in the first half of 2015 to MOP25.22 billion as public revenue kept falling at a time when public expenditure went up. The revised 2015 budget – approved by Macau’s Legislative Assembly in May – foresees a full-2015 surplus of MOP18.8 billion.
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”Assuming that our [Tigre de Cristal] phase two project and the other future operators’ development plans remain on track, we may see the benefits of a ‘cluster’ effect [in the Primorye Integrated Entertainment Zone] as early as 2021”
Summit Ascent, lead developer of Tigre de Cristal