GGRAsia – Galaxy so far not asked Macau for tax break: Francis Lui

Galaxy so far not asked Macau for tax break: Francis Lui

Feb 27, 2020 Newsdesk Latest News, Macau, Top of the deck

Francis Lui Yiu Tung (pictured), vice-chairman at Macau casino operator Galaxy Entertainment Group Ltd, said on Thursday that “at present” his firm had not asked the Macau government for “tax concessions” in the light of the downturn in the city’s casino business following the coronavirus health alert.

Mr Lui made the comment during a question-and-answer session in a Thursday media briefing, following Galaxy Entertainment’s announcement of its full-year 2019 results.

The issue of possible tax breaks – including perhaps some relief on the 39 percent effective rate paid to the city’s government by Macau’s six operators on their gross gaming revenue – had been raised last week by the chief executive of SJM Holdings Ltd.

Galaxy Entertainment’s vice-chairman said on Thursday: “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. And this is timely as it will benefit small and medium enterprises and also the different sectors in the society to sustain and protect their ongoing livelihood.”

Mr Lui added: “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.”

He further stated that “at present… no [tax concession] requests” had been made “so far to the government”.

Following the earlier suggestion from SJM Holdings, GGRAsia had asked the Macau government about the topic. We were told the authorities had not received up to that point, any request for tax breaks.

Mr Lui said in his Thursday commentary that his firm expected a “relatively big” impact on business due to the coronavirus episode. But he stressed that at the moment, it was difficult to quantify it, as it depended on “when the virus situation can be fully controlled”.

Demand for Macau gaming might not pick up until the fourth quarter this year, without a rapid resolution of the crisis regionally, said a Tuesday note from JP Morgan Securities (Asia Pacific) Ltd.

Mr Lui stated on Thursday: “It is very difficult for us to foresee the impact [of coronavirus] on our profits. It is difficult to give it a size at this point in time but it will not be small.”

“In the [Chinese] mainland, things are stabilising as far as the virus situation goes, and if that is the case, I’m confident that in a short period of time – when individual travellers and package tours can come to Macau – we will be able to resume the pace of growth,” Mr Lui added.

Webcast, Galaxy Macau construction

Thursday’s media briefing for the full-year results was done over the Internet, with video streaming of statements and answers by senior executives, and questions sent in by text by the media, rather than via the usual press conference. The firm had earlier said the arrangement was “in light of the latest development of Covid-19″.

The Galaxy Entertainment vice-chairman said in the briefing that the firm’s daily operating expenses – it directly operates three resorts; Galaxy Macau and Broadway Macau on Cotai, and StarWorld Hotel on Macau peninsula – stood currently at “about US$3 million”. The firm was seeking to “minimise” such expense “as much as possible”, said the Galaxy Entertainment executive, but stressed that the firm was not imposing any staff layoffs.

At the media briefing, Mr Lui also mentioned there had been some disruption on the work for Phase 3 and Phase 4 at Galaxy Macau, but things had now improved somewhat. He stressed that his firm was “keeping” its original launch timetable for the new Cotai phases.

Galaxy Entertainement had noted to GGRAsia earlier this week that it was still aiming at a first-half 2021 launch for a portion of Galaxy Macau Phase 3, despite having paused some construction work at Galaxy Macau amid the coronavirus alert.

Phase 3 of Galaxy Macau is to feature 1,500 hotel rooms, some casino space, a large-scale arena with 16,000 seats, and 400,000 square feet (37,161 sq metres) of meetings, incentives, conferences and exhibitions (MICE) facilities, according to information previously released by the group. Phase 3 and Phase 4 combined, would provide approximately 4,000 additional hotel rooms and villas to the resort, including what the firm calls “family and high-end rooms”.

Mr Lui stated to media on Thursday: “On February 5, the [Macau] government had requested a suspension of construction [with the] aim of lowering the possibility of the coronavirus spreading. Therefore, we have slowed down the works on the sites,” unless it involved “absolutely necessary” tasks.

The outright suspension of Cotai work had lasted 15 days until February 20, he noted. “So for all the workers [based] in Macau, they have all resumed their tasks. As for the workers from Zhuhai…they have to go through a quarantine for 14 days [in Zhuhai] before coming back to Macau” for work, Mr Lui added, referring to a Macau government instruction that came into effect on February 20.

The vice-chairman added regarding Galaxy Macau new construction: “So, we are resuming works in phases. And for these quarantined workers…when they return to Macau in the next two to three days, we should be able to resume works [in] full force.”