GGRAsia – Macau ops face yearly GGR targets, minimum tax pledge

Macau ops face yearly GGR targets, minimum tax pledge

Jan 18, 2022 Newsdesk Latest News, Macau, Top of the deck

Macau gaming concessionaires will in the future each have a minimum annual target of casino gross gaming revenue (GGR) to meet, according to the draft gaming bill freshly tabled on the website of the city’s Legislative Assembly. If operators fail to meet such target, they will still be required to pay the city’s government the shortfall in the gaming tax the authorities had been expecting.

The GGR target will be calculated based on the maximum number of gaming tables and gaming machines that each concessionaire is authorised to operate in any given year.

The bill states the city’s Chief Executive is to set a minimum amount of casino GGR that each table or machine should generate annually.

If a licensee fails to meet that target – based on its average table and gaming machine performance –, it will have to make a payment to the government, referred to as a “premium”. Such premium will equal to the difference between the amount of tax the concessionaire paid on its actual GGR, versus the amount of tax it would have paid had it met its minimum GGR target set.

The Macau government charges a direct tax of 35 percent on casino GGR.

The draft document says that if for two consecutive years such gaming inventory held by a concessionaire does not meet the annual GGR minimum decided by the government, then the incumbent secretary for economy and finance can take back the tables or machines.

Late last year, a number of commentators had told GGRAsia that Macau was likely to have a shortfall in its annual gaming tax income, relative to the levels of public spending to which it usually has been pledged, if junket-based VIP gambling was no longer to make a significant contribution to the city’s coffers.

Macau’s casino GGR grew 43.7 percent year-on-year in the 12 months to December 31, but was down 79.3 percent on the pre-pandemic numbers of 2019.

The existing concessionaires each already pay an annual fixed premium based on criteria including to the number of gaming venues they operate, their respective table and electronic games inventory, the games they operate, and the location of their casinos. That requirement will continue under the new system.

Macau has also proposed in its draft gaming bill a formal cap on the number of casino tables and gaming machines in the local casino market, with the details to be set out via a chief executive dispatch, which will be published in the city’s official gazette.