GGRAsia – Commissions drive up Macau 2017 gaming overheads

Commissions drive up Macau 2017 gaming overheads

Sep 11, 2018 Newsdesk Latest News, Macau, Top of the deck

Commissions and certain other costs linked to Macau gaming sector sales rose 23 percent year-on-year in 2017, according to the latest edition of the city government’s Gaming Sector Survey published on Monday.

Such increase was for expenditure on “purchase of goods, commission paid and customer rebate” and amounted to MOP60.86 billion (US$7.53 billion) for the year, taking up 53 percent of total gaming sector expenditure.

Total sectoral expenditure for what the report termed “the 10 enterprises engaging in gaming activities” amounted MOP114.89 billion, up by 18.5 percent year-on-year.

Macau has six licensed casino operators. The local government has also granted public concessions to operators of other gaming activities including horse racing, sports betting and lottery, but the bulk of local gaming revenue – and expenditure in the sector – is generated by casinos.

Sectoral expenditure amounted to just under 43 percent of all sectoral receipts; the latter aggregating to MOP268.01 billion in 2017.

Casino sector receipts for 2017 had risen by 19 percent year-on-year to MOP265.74 billion, said in January the local casino regulator, the Gaming Inspection and Coordination Bureau.

Operating expenses for the gaming sector as a whole increased by 16.7 percent year-on-year to MOP27.94 billion, said the city’s Statistics and Census Service in its Monday release.

Such operating expenses were “mainly incurred on complimentary goods and services, such as hotel accommodation and food and beverage, provided to customers,” said the statistics bureau, and amounted to MOP12.60 billion. Management services and contractual services accounted for MOP5.18 billion; and marketing and publicity costs were MOP4.79 billion. Those three categories of operating expense rose by 16.5 percent, 32.3 percent and 12.0 percent respectively.

Compensation of the sector’s employees went up by 7.4 percent year-on-year to MOP21.33 billion. Employer contributions to pension funds, provident funds and social security went up 3.2 percent year-on-year, accounting for 4.9 percent of all compensation. A heading called “other benefits”, amounting to a small fraction of all compensation, decreased by 23.7 percent year-on-year.

The sector’s non-operating expenses – including depreciation and interest paid – totalled MOP4.76 billion, representing an increase of 30.5 percent year-on-year.

Gross value added – measuring the sector’s contribution to local economy – totalled MOP179.07 billion, up by 17.6 percent year-on-year.

The gross surplus of the sector amounted to MOP157.74 billion, up by 19.1 percent year-on-year, according to Monday’s report.