The Macau government collected a total of MOP13.4 billion (US$1.68 billion) in direct taxes from gaming in the first two months of 2016, down by 20.9 percent from the prior-year period, according to data disclosed this week by Macau’s Financial Services Bureau.
Overall, the figures show a 21.7 percent year-on-year decrease in government revenue for the two-month period. The total revenue for the period was MOP15.94 billion, about MOP3.64 billion less than that of a year ago.
Direct taxes from gaming brought in 84.2 percent of the Macau government’s total revenue in the two months ended February 29.
Due to the decline in revenue, the Macau government surplus fell in the reporting period. The surplus in the first two months of 2016 was MOP8.56 billion, down 46.4 percent from the prior-year period.
The lacklustre performance is a consequence of declining gross gaming revenue (GGR) in the city.
The city levies an effective tax rate of 39 percent on casino gaming revenue – 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 collected MOP84.4 billion in fiscal revenues from direct taxes on gaming last year, down 34.5 percent from 2014. The 2015 take was the smallest since 2010.
The government forecasts GGR to come in at MOP200 billion in 2016, an average of MOP16.6 billion per month. The accumulated gaming revenue for the first two months of 2016 stood at nearly MOP38.20 billion, a decline of 11.8 percent judged year-on-year.
The director of Macau’s Gaming Inspection and Coordination Bureau, Paulo Martins Chan, said in recent comments he thought the worst was over for the city’s gaming industry. “The most difficult times are now behind us. I think that, if there’s a decline [in casino revenue] this year, it will be a slight decline,” Mr Chan told public broadcaster Radio Macau.
The government has said it expects to collect a total of MOP70 billion in fiscal revenue from direct taxes on gaming this year, and a budget surplus of MOP3.5 billion.
Analysts at Morgan Stanley Asia Ltd said in a note in mid-January they saw little pressure for public policy easing in support of Macau’s casino industry, noting that the government’s gaming tax-fuelled surplus would still be “very comfortable” this year.
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”Given that the blanket casino closure [in Macau due to Typhoon Mangkhut] happened on an all-important weekend day… we expect that somewhere between MOP1.1 billion [US$136.2 million] and MOP1.5 billion in GGR will be lost”
Analyst at Union Gaming Securities Asia