The Macau government has collected just over MOP18.48 billion (US$2.32 billion) in tax revenue from the city’s gaming industry in the first three months of this year. The figure is down 37.6 percent compared to the prior-year period, showed official data published by the city’s Financial Services Bureau on Friday.
The data show the government collected just MOP1.25 billion in direct tax from the city’s gaming industry in March. In its budget for 2020, the government had forecast it would gather at least MOP8.18 billion in gaming tax on a monthly basis.
The figures published on Friday showed the tax sum collected so far this year from the gaming industry was 18.8 percent of the amount the government had budgeted for the whole year. The government had originally forecast it would collect nearly MOP98.22 billion in such tax in full-year 2020.
Macau casino gross gaming revenue (GGR) declined by 79.7 percent in March in year-on-year terms, to just under MOP5.26 billion, according to official data. That was however a sharp rise judged month-on-month with February, when the city’s casinos were closed for 15 days to halt the spread locally of the Covid-19 pandemic.
Aggregate Macau casino GGR for the first quarter of 2020 stood at approximately MOP30.49 billion, a contraction of 60.0 percent year-on-year, showed official data.
The government taxes the GGR of Macau casinos at a rate of 35 percent, but other levies on the casino gaming gross raise the tax rate to 39 percent in effect. Other taxes on the Macau gambling sector include levies on the income of Chinese traditional lotteries, on horse racing, instant lotteries and tax on commissions earned by operators of gambling junkets.
The tax-take figures in a given calendar period and the city’s casino GGR in such a time frame are not directly comparable for a number of reasons. They include the fact that there is typically a delay between the point where GGR is recorded in Macau casino operations, and the point at which tax is registered by the Macau government as having been paid on such play.
The latest official data also indicated that revenue from gaming collected so far in 2020 accounted for about 89.9 percent of the slightly above MOP20.56 billion the government collected from all sources.
The authorities had budgeted for a fiscal surplus of just below MOP20.79 billion for the whole of 2020. At the end of March, the government surplus was nearly MOP4.73 billion, down 78.2percent from the prior-year period, official figures indicate. Such decline was due to a jump in expenses in March, because of several financial measures announced to help boost the city’s economy amid the negative impact from Covid-19.
In mid-March, the Macau government halved its forecast for the city’s casino GGR in full-year 2020. Such forecast for this year is now MOP130 billion, down from a projection of MOP260 billion, announced in November.
As a result, the government said it now expected a MOP38.95-billion deficit for full-year 2020, and that it would have to tap its “extraordinary” financial reserves to cover the shortfall.
Since the reopening of the market on February 20, Macau casinos have been operating with limited capacity due to social distancing policies on gaming floors. These include a limit on the number of gaming tables allowed to operate and a restriction on the number of available seats at each table, as well as reduced availability regarding slot machines.
Instinet LLC, the research arm of Nomura, said in a Monday note that it expected a recovery in Macau casino GGR “to begin in June”.
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Vitaly Umansky, Tianjiao Yu and Kelsey Zhu
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