Macau Concessionaires to pay annual tax on gaming floors
The government of Macau SAR has directed its six concessionaires to pay a new form of tax in the form of an annual gaming floor utilization fee which will essentially have the operators renting their casino floors. This utilization fee will be paid for the entire duration of their concession, starting with a base sum of MOP$750 per square meter of the gaming space they operate in, an increase to MOP$2,500 per square meter and further increases in the sum for subsequent years according to Macau’s average price index. This new stream of income will help the government bounce back from the losses it incurred for the past two years.
Macau recorded dismal figures for its gross gaming revenue in 2022 which amounted to its lowest performance since 2004. GGR was posted at MOP$42.2 billion, a 51.3% decrease from its 2021 figures. This is undoubtedly caused by the recurring COVID-19 outbreak and the restrictive zero-covid policy which vastly reduced the influx of tourists from mainland China and other parts of the world. Macau’s economy is struggling to survive and the government is relying on the gaming sector, its prominent sector, to bring the much-needed impetus to the ailing economy.
Effective from the first day of 2023, all concessionaires – except Galaxy Entertainment – have confirmed in one form or the other their agreement to the government’s contract. Payment is expected to come in annually by March.
Sands China has confirmed it will be paying the rent tax on Sands, Venetian, The Plaza Macau, The Londoner Macau and Parisian Macau. SJM has also agreed to all casino spaces namely Casino Grand Lisboa, Casino Grand Lisboa Palace, Casino Lisboa and Casino Oceanus at Jai- Alai. Wynn Resorts will continue operating from Wynn Macau and Wynn Palace. MGM China will also pay for the use of two spaces – MGM Macau and MGM Cotai. Galaxy Entertainment Group will pay for Star World, Galaxy Macau and Broadway casinos. Lastly, Melco will be paying annual fees for the use of their gaming floors namely Altira, City of Dreams and Studio City, as well as five Mocha slot machine parlours and “satellite casino” Grand Dragon.
Concessionaires must also pay a special gaming tax of 35% on GGR and and additional 5% to go towards several social initiatives in the region. Asides from that are the annual fixed premium of MOP$30 million that all concessionaires must pay to the government, in addition to the annual variable premiums of MOP$300,000, MOP$150,000 and MOP$1,000 taxes on all slots and table games.