The Macau government currently has no plans to consider giving the local casino industry some tax breaks amid uncertainties over the Covid-19 virus alert. So said Lei Wai Nong (pictured), the city’s Secretary for Economy and Finance, during a Thursday media briefing.
“For now, we do not intend to introduce any [tax] changes,” he said.
Mr Lei – the official who has direct oversight of the city’s casino industry – noted that any tax breaks for the casino industry would involve reviewing Macau’s gaming law.
The office of Mr Lei told GGRAsia last week it had not received any request from the city’s casino operators for gaming tax breaks amid the current coronavirus alert.
In February, Ambrose So Shu Fai, vice-chairman and chief executive of Macau casino operator SJM Holdings Ltd, told a Hong Kong media outlet that his firm thought the idea of a reduction in premiums payable to the Macau government on casino tables and gaming machines – and perhaps certain rebates on undefined “gaming-related” taxation” – might be viewed sympathetically by the local authorities because of the business uncertainty caused by Covid-19.
Commenting on the idea, Francis Lui Yiu Tung, vice-chairman at Macau casino operator Galaxy Entertainment Group Ltd, said in late February in response to a journalist’s query that “for the government, I think if they can be sympathetic to the gaming industry – to the contribution that we have made for the community and the society – that will be good.”
The Galaxy Entertainment executive further stated at the time: “At present, we have not asked the Macau government on any [tax] concessions but we believe the government is already introducing a series of measures…for the community of Macau.”
In Macau, “gaming tax” is usually a reference to taxation on gross gaming revenue (GGR). This is currently levied at 35 percent, although other charges – for certain community causes locally – take the effective tax rate on GGR up to 39 percent.
Macau casino GGR declined by 87.8 percent in February in year-on-year terms, negatively impacted by a 15-day shutdown ordered by the city’s government as part of the efforts to contain the spread locally of the Covid-19 disease. Such GGR was MOP3.10 billion (US$387 million), according to data issued on Sunday by the city’s casino regulator, the Gaming Inspection and Coordination Bureau, a body also known as DICJ.
Even after partial resumption of gaming business following the casino shutdown, casino executives and investment analysts have said they are not expecting the Macau market to see a fast ramping up of trade, due to factors including various travel restrictions imposed in China and beyond to try to contain the virus’ spread.
Despite being asked by reporters on Thursday, Secretary Lei did not offer any forecast for March casino GGR in Macau. He noted Macau’s overall economic situation was still volatile but said he expected casino business could pick up rapidly once the Covid-19 outbreak in neighbouring regions was tackled.
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Analyst at Roth Capital Partners