Macau’s budget plan for the current financial year will in likelihood be adjusted, as the outlook for 2025 public fiscal income could be “less optimistic than anticipated”, said on Monday the city’s Chief Executive (CE), Sam Hou Fai (pictured), when delivering his first Policy Address since assuming office in December.
His cautious commentary was amid a “slowing of post-pandemic recovery momentum” seen in the travel and gaming sectors, added Mr Sam.
In his Policy Address for Fiscal Year 2025 – delivered at the city’s Legislative Assembly – Mr Sam cited economic challenges Macau now faces. That was against the backdrop of a local economy still largely focused on tourism, and increasing uncertainties for the global economy, under “intensifying unilateralism and protectionism”.
The office of his predecessor, Ho Iat Seng, had forecast in November that Macau’s 2025 casino gross gaming revenue (GGR) might reach MOP240 billion (circa US$30 billion). Macau official GGR forecasts are usually conservative. Though the current Secretary for Economy and Finance, Tai Kin Ip, had also recently expressed the possibility that the forecast via the outgoing administration, might now not be met.
Taxation on the city’s GGR – the effective rate is 40 percent – is the most important source of Macau’s public income.
Mr Sam noted in his Monday speech, that Macau faced “intensifying” competition regionally in the tourism and gaming sectors.
He stated: “The post-pandemic recovery momentum in Macau’s travel and gaming sectors has started gradually to slow, so [the oulook for] this financial year’s fiscal income may not be as optimistic” as had been hoped.
He also observed: “Some new [public] expenditures that carry a considerably large value are not yet included in the published [2025] budget plan, which means the budget plan will likely be adjusted.”
The Chief Executive did not mention whether the Macau government had already adjusted its forecast on the city’s 2025 gaming income.
Secretary Tai had mentioned at the beginning of April, soon after the March GGR numbers were issued, that the “expected monthly average of MOP20 billion” in GGR was not achieved in the first three months of 2025.
Once Mr Sam had delivered his policy address on Monday, he attended a press conference, and fielded questions from the media.
He expressed concerns about potentially “huge” impact from the ongoing United States-China trade tariff row, on the value of China’s currency the yuan, and on the consumption power of mainland China visitors to Macau. These things could have a negative effect on Macau’s tourism and gaming businesses.
On Thursday, U.S. President Donald Trump raised to a minimum of 145 percent, the U.S. tariff on imports from China. The same day, Beijing raised its own tariffs on U.S. goods to 84 percent and then increased it to 125 percent, the latter rate having taken effect on Saturday.
“We are yet to assess exactly how big the impact from this external economic [event] on us is,” said Mr Sam in response to a question from the local media regarding U.S. tariffs.
“We have MOP115 billion in regular public expenses items, in which a large support comes from the expected MOP93 billion in [all forms of] gaming-related levies – built on the basis that we will see MOP20 billion [in GGR] a month. If we are not achieving that, our fiscal foundation will be affected,” the Macau chief executive added, referring to the 2025 financial year budget plan.
Operator concession commitments, satellite casinos’ future
For the Macau gaming sector, the 2025 policy address also noted that the Macau government would monitor the city’s six gaming operators in relation to their execution of non-gaming investment commitments tied to their gaming concession rights.
The policy address also mentioned the city’s government would handle the “coordination” and “contingency plans” required for the upcoming conclusion of the three-year grace period for Macau’s satellite casinos to transition into a new business model.
Under the revamped gaming regulatory framework – coinciding with the current concessions of the six Macau operators – from 2026, the third-party investors in satellite casinos will only be permitted to earn a “management fee” via a “management company”.
They will not be allowed to take part in other traditional business practices for the satellite sector, such as having a share of gaming revenue. A three-year grace period from 2023 until the end of this year, currently permits the latter system to persist.
“The new gaming law already has a very concrete framework on how they [satellite casinos] should be treated,” Mr Sam remarked in response to press questions on the satellite casinos’ future in the Monday briefing.
“The most important thing is how the satellite [casinos’] stakeholders and their respective owner concessionaires will handle it.
“There are rules specified in it [the gaming law], including on the subjects related to the employees… The government will duly confirm how it will execute the legal regulations,” the Chief Executive also stated during the press briefing.
