The Macau government fiscal surplus is down by 58.3 percent year-on-year in the first half of 2015 to MOP25.22 billion (US$3.16 billion) as public revenue – which mainly relies on direct tax from gaming – keeps falling at a time when public expenditure is going up.
Much of the city’s public revenue comes from taxes on gambling, levied at an effective rate of 39 percent of the gross. The government’s total revenue stood at MOP55.13 billion at the end of June, 33.9 percent lower than in the prior-year period, according to data disclosed by the city’s Financial Services Bureau.
Direct taxes from gaming brought in 82.9 percent of the Macau government’s total revenue in the six months to June 30. The government collected a total of MOP45.72 billion in direct taxes from gaming in the first half of 2015, down by 35.6 percent year-on-year.
Accumulated direct tax from gaming has been declining as casino gross gaming revenue (GGR) in Macau has fallen for 13 consecutive months when judged year-on-year. Aggregate GGR for the first six months of 2015 stands 37.0 percent lower than in the same period in 2014, at about MOP121.65 billion.
While government revenue is declining, expenditure has actually been increasing. Public spending in the first six months of 2015 reached MOP29.91 billion, up by 30.0 percent year-on-year, the official data show.
Although the government’s surplus is down more than 58 percent year-on-year, it is however currently above the MOP18.81-billion forecast for the full year. The execution rate on budgeted spending stood at 134.1 percent in the first half according to finance bureau data.
The forecast on the size of the 2015 public surplus was revised in April in an amended budget approved by the territory’s Legislative Assembly. The government’s new budget is based on an estimate that average gross monthly gaming revenue will be MOP20 billion this year, down from an earlier estimate of MOP27.5 billion.
Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac, reiterated last month that if the average GGR monthly tally keeps above MOP20 billion there would be no need for austerity measures. But he warned that if casino revenue falls below MOP18 billion this month, the government would have to consider spending cuts. That was on the basis that such a tally for July would push the average monthly GGR for the first seven months of 2015 to below the MOP20 billion threshold.
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"We forecast Grand Lisboa Palace will have EBITDA of HKD2.0 billion (US$260 million) with 330 tables by 2022, and HKD3.5 billion with 380 tables by 2023"
Credit rating agency Fitch Ratings