Macau’s Secretary for Economy and Finance Lionel Leong Vai Tac (pictured) said the government would only look into a potential change in gaming tax rates after conducting a “mid-term review” of the gaming industry.
The review, Mr Leong told reporters on Sunday, would be conducted this year. Unnamed local tertiary institutions would be in charge of it, he added.
“[The mid-term review] will mainly look at whether the gaming operators have fulfilled the promises they made when they got their concessions,” Mr Leong said, as quoted by the Macau Post newspaper.
“It would be after the review that we might consider any changes in the gaming industry,” he added. “The results of the mid-term review will be the foundation of whether we will renew their gaming concessions [but under new terms] or continue the way it is now.”
The secretary said some of the areas the review would be looking into would be operators’ non-gaming offering and corporate social responsibility. He added that the review would also determine if gaming operators were fulfilling their role to promote a “healthy” development of the gaming industry and helping to position Macau as a world tourism and leisure centre, as envisioned by Beijing.
Mr Leong downplayed suggestions of a potential hike of the city’s gaming tax. CLSA Ltd’s analyst Aaron Fischer last week said Macau might choose to hike its gaming tax to 43 percent from the current effective rate of 39 percent, as part of the casino licence renewal process.
Macau levies an effective tax rate of 39 percent on casino gross gaming revenue (GGR) – 35 percent in direct government tax, and the remainder in a number of levies to pay for a range of community good causes.
Macau’s six casino concessions expire between 2020 and 2022. In August, Chief Executive Fernando Chui Sai On pledged to carry out a public consultation on the renewal process ahead of making any decision on the matter.
Commenting on the seven-month losing streak in Macau’s casino industry, which last year recorded its first annual decline in gambling revenue since the liberalisation of the market in 2002, Mr Leong said it was the “new normal”.
The secretary also stressed that the cap on live gaming tables would not be amended at least until 2022. He added that since he took office on December 20, he had yet to receive any application from the city’s six gaming operators for more live gaming tables.
The Macau government has imposed a cap that seeks to limit the growth of live dealer table numbers to 3 percent compound annual expansion until end-2022 from a base of 5,485 tables recorded by the authorities at the end of the fourth quarter in 2012.
Mr Leong also confirmed a VIP junket operator was reducing its operations in Macau, but he did not mention the name of the firm. The secretary however dismissed suggestions that meant an industry-wide decline in other Macau junket operations. He added that the Labour Affairs Bureau was already handling the matter and providing support to the workers that were being laid off.
Macau junket operator David Group confirmed over the weekend that it would close some of its VIP rooms in Macau.
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”Ramp ups [of new Macau casinos] are taking a little bit longer. The market is somewhat volatile at the moment, but we continue to look at all the opportunities and are still very comfortable that things are starting to move ahead”
Chief executive of MGM China Holdings