Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac (pictured), has estimated the city’s casino gross gaming revenue (GGR) tally for July may come in below MOP18 billion (US$2.25 billion). That would mean a drop of more than 36 percent in year-on-year terms.
Mr Leong added that, if that were the case, the Macau government would consider introducing austerity measures to control spending as early as next month, public broadcaster TDM reported.
This month’s GGR is tracking for a 35-percent drop from the prior-year month, according to several investment analysts. July 2014 GGR stood at MOP28.4 billion.
The gaming industry is the major source of Macau’s fiscal revenues. The government levies an effective tax rate of 39 percent on casino GGR – 35 percent in direct government tax, and the remainder in a number of levies to pay for a range of community good causes.
Earlier this month, ratings agency Moody’s Investors Service had said that the ongoing slowdown in gaming revenue in Macau was unlikely to cause any significant harm to the credit profile of the city’s government in the short- to medium-term.
“Based on projections, this month’s gaming revenue could be below MOP18 billion. As such, it will not reach our target of MOP18.35 billion, in which case we might have to carry out fiscal adjustment policies,” Mr Leong told reporters on Saturday.
He added: “The government will meet at the beginning of August and brief the chief executive before adopting such policies.”
In June, monthly GGR in Macau fell below the MOP18.35-billion line set by the government for 2015 – the first time this year – when it stood at just MOP17.4 billion. Casino GGR has fallen for 13 consecutive months when judged year-on-year.
Lawrence Ho Yau Lung, co-chairman and chief executive of casino firm Melco Crown Entertainment Ltd, last week said Macau casino operators might also have to consider more cost-cutting measures as GGR in the city keeps falling. But in his Saturday comments, Mr Leong said he was confident that the unemployment rate would still remain low in Macau – it currently stands at 1.8 percent – as jobs are being created in non-gaming sectors.
Macau’s 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.
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“We see that basically the ‘golden’ periods [for Macau's casino industry] are all concentrated in the second half of this year”
Lei Wai Nong
Macau’s Secretary for Economy and Finance