Macau Sees 58% Surge in Gaming Tax Revenue, Driven by Economic Recovery

Macaus-gaming-tax-income-jumps-58-YoY-between-Jan-JulyThe Macau government reported a significant increase in gaming tax revenue for the first seven months of 2024, highlighting the region’s strong economic rebound. The income from gaming taxes surged by nearly 58% year-on-year, reaching MOP51.6 billion ($6.4 billion) as the Special Administrative Region (SAR) continued its post-COVID recovery.

Macau’s Gaming Tax Revenue Boost

The increase in gaming taxes contributed to a 49.7% rise in overall government revenue, totaling MOP61.1 billion ($7.5 billion). This is the highest revenue figure recorded since the onset of the COVID-19 pandemic in 2020, signaling a robust recovery for Macau’s economy.

Gross gaming revenue (GGR) also experienced a significant jump, increasing by 36.7% year-on-year to MOP132.2 billion ($16.4 billion) between January and July 2024. The surge in GGR is attributed to the region’s thriving gaming sector, which continues to play a pivotal role in Macau’s economic resurgence.

Under Macau’s 10-year gaming concession system, which was implemented in January 2023, the effective tax rate on casino gross gaming revenue is set at 40%. This taxation model has proven beneficial for Macau, as it allowed the government to collect 60% of its projected 2024 revenue within the first seven months of the year. The region’s budget anticipates a total revenue of MOP102 billion ($12.7 billion) for 2024.

Increased Public Spending and Budget Surplus

Alongside the rise in revenue, public spending in Macau increased by 9.6% to MOP52.2 billion ($6.5 billion). However, infrastructure investment saw only a modest growth of 1.1%, totaling MOP9.69 billion ($1.2 billion). Current expenditure, on the other hand, rose significantly by 10.2% to MOP41.9 billion ($5.2 billion). This increase was driven primarily by an 11.7% rise insocial support and subsidies, as well as a 4.4% increase in civil servant expenses.

Despite the increase in spending, Macau’s 2024 budget predicts a return to surpluses in public accounts, marking a recovery after three years of economic challenges due to the pandemic. Between January and July 2024, Macau recorded a surplus of MOP9.27 billion ($1.2 billion), more than doubling the surplus from the same period in 2023.

The substantial rise in gaming tax revenue and the subsequent budget surplus show Macau’s resilient recovery and the vital role that the gaming industry continues to play in the region’s economy.

Source:

Macau’s Gaming Tax Income Jumps 58% YoY Between Jan-July.”, agbrief.com, 16 Aug. 2024.

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Macau Casino Pit Boss Allegedly Stole HK$400K in Gaming Chips

A Macau casino pit boss is accused of stealing gaming chips from her employer in the Chinese Special Administrative Region (SAR).

Macau casino theft crime
Macau Judiciary Police officers conduct random patron checks on July 28, 2024, inside a Cotai Strip casino. Law enforcement says its ongoing surveillance of the Chinese gaming hub detected a pit supervisor stealing high-value chips from a roulette table. (Image: Macau SAR Government)

Macau’s Judiciary Police says surveillance video of a nondisclosed casino floor in the city’s ZAPE District (Zona Aterro do Porto Exterior) allegedly shows a female supervisor swindling gaming chips from a roulette table on four different occasions.

Law enforcement contends that the woman, identified only as a 56-year-old local, used double-sided adhesive tape to slyly steal gaming chips. Police believe the woman stole three HK$100K chips on June 1, 3, and July 21. Casino security said they observed the worker allegedly steal a fourth HK$100K token over the weekend.

The total value of the theft — HK$400K — is worth about US$51,400.

Crime Crackdown

Judiciary Police say the woman was caught red-handed over the weekend while in possession of the HK$100K gaming chip and a sticky substance on her one palm. The woman was arrested and charged with aggravated theft.  

Macau’s law enforcement agencies this summer are embarking on a crackdown on illicit activities inside and around casinos. Dubbed “Thunderbolt 2024,” police officers have ramped up their presence throughout the SAR but are focusing on the Cotai and ZAPE districts.

ZAPE is located east of Grand Lisboa, Wynn Macau, and MGM Macau downtown on the city’s main peninsula. The neighborhood is home to several smaller casino hotels including the L’Arc. The Cotai District is home to the Cotai Strip, Macau’s glitzy main drag where five-star ultra-luxury resort casinos dominate the skyline.  

The law enforcement mobilization has resulted in several large-scale criminal takedowns.

Late last week, police apprehended a woman accused of stealing HK$320K (US$41K) from an unsuspecting gambler. On Aug. 1, casino surveillance caught a woman sitting down next to a man playing a table game with a large pile of gaming chips inside a fanny pack, described by Judiciary Police as a “crossbody bag.”

After chatting for roughly three minutes, the woman stood and walked away. Moments later, the man realized his fanny pack was missing HK$320K worth of chips.

After notifying casino security and police being tipped off, the woman was found on surveillance video at another casino in the ZAPE District exchanging the chips for cash. She was located later and arrested, but only HK$82K was recovered. The woman was also charged with aggravated theft.

Non-Casino Raids 

Macau’s Thunderbolt 2024 initiative extends to gambling operations outside of casinos. Law enforcement continues to focus its energies on ridding the region of such illegal gambling hubs and networks, much of which often focus on sports gambling.

Last month, Judiciary Police, in cross-border conjunction with police in Hong Kong and the Guangdong Province, apprehended 93 people suspected to be involved in an illegal sports betting ring. The sting discovered that at least MOP1.08 billion (US$134 million) in illegal bets had allegedly been facilitated by the operation.

Judiciary Police said 50 of the suspects reside in Macau, most notably one of the law enforcement agency’s own in a Macau customs officer.

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Macau Maintains Recovery Momentum, April Gaming Revenue Totals $1.82B

Macau casinos maintained their recovery momentum in April as gross gaming revenue (GGR) continued to rebound from the COVID-19 pandemic.

Macau gaming revenue casino China COVID-19
Pedestrians walk the Cotai Strip in Macau near Sands China’s Londoner casino and resort. Macau casinos won more than $1.8 billion in April 2023, the region’s best gaming month since the COVID-19 pandemic emerged. (Image: Bloomberg)

Macau’s Gaming Inspection and Coordination Bureau revealed Monday that the region’s six commercial casino operators won MOP14.72 billion (US$1.82 billion) in April 2023. That marks a 16% month-over-month improvement from March.

April 2023 was 450% richer for the casinos than April 2022 when GGR totaled just $332 million. April 2022 was Macau’s worst month in terms of gaming income since September 2020, as the enclave was reeling from its most significant coronavirus outbreak of the entire pandemic.

Macau’s economy has been on a pandemic rebound since China President Xi Jinping announced in late November he would be ditching his “zero-COVID” policy that had been scorned by many foreign leaders and international cooperatives such as the World Health Organization.

Macau Bounce Back

Macau’s gaming recovery comes about two years after other major casino markets, including Nevada and Las Vegas, experienced their own.

China’s efforts to eliminate COVID-19 by isolating infected persons and locking down cities among even small outbreaks proved unsustainable. Amid public unrest and widespread protests, Xi finally agreed to lift “zero-COVID.”

Health officials in December and early this year worried Xi’s lockdowns over the past three years suppressed herd immunity and could result in mass COVID-19 causalities with “zero-COVID” being ditched. After case counts soared in the immediate aftermath of “zero-COVID,” much of China and its two SARs finally returned to a sense of normal. Macau is one of two Special Administrative Regions in China along with Hong Kong.

In January, Macau was given the go-ahead to end its pandemic-related entry procedures. The enclave was opened to all of the mainland, plus Hong Kong and Taiwan, with no border rules in place such as testing or quarantine mandates. The Chinese casino hub is additionally open to foreigners, but they must still present a recently conducted negative COVID-19 test for entry.

Business in Macau has been good since January and April only further improved on the gaming resurgence.

March 2023 marked Macau’s best gaming month since January 2020, and April turned out to be even better. Through the first four months of 2023, GGR totaled $6.12 billion, up 141% year over year.

US Tensions

Macau is open to the world but US officials continue to caution citizens about venturing into the country and its casino enclave. US Department of State officials say China continues to subjectively enforce laws on foreigners that threaten travelers’ safety.

“Reconsider travel to the People’s Republic of China (PRC), including the Special Administrative Regions of Hong Kong and Macau, due to arbitrary enforcement of local laws,” a China Travel Advisory issued by the US State Department reads.

US citizens traveling or residing in the PRC, including the Hong Kong SAR and the Macau SAR, may be detained without access to US consular services or information about their alleged crime. US citizens in the PRC may be subjected to prolonged interrogations and extended detention without due process of law,” the notice added.

The US is a minor feeder market for Macau. In 2019, the US accounted for just 200K visitors to Macau of the record 39.4 million travelers who ventured into the enclave that year.

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Massive Jump in Macau Bet Size During CNY

massive_jump_in_macau_bet_size_during_cnyCitigroup Global Markets Inc. has completed a research paper on Macau gambling that covers the recently ended week-long Chinese New Year (CNY) celebrations. Some of the numbers draw direct comparisons between CNY 2019, the last pre-Covid tally, and CNY 2023 the first time the government has allowed free travel since the start of the pandemic.

The number of gamblers was not as high this year as it was in the same period in 2019, but according to a GGRAsia report on the gambling survey and analysis, the amount bet on each hand was “much higher” than in the previous period.

The surveys focused on premium mass gambling floors and mass gambling, rather than VIP rooms and junket tables.

One player observed in the survey reportedly bet about US$92,500 (HKD 725,000) on a baccarat bet at MGM Macau’s premium mass area.

Fat Stacks of Chips – Big Bets

In Cotai at Wynn Palace, Citigroup surveyors reported that one gambler was observed with “an approximately HKD 6-million chip stack in front of him, and he was betting HKD 300,000 a hand,” according to the report.

January 27th was the last day of the seven-day Chinese holiday marking the lunar new year and celebrated all over the world. However, most CNY celebrations outside of mainland China, Macau, and Hong Kong – which are special administrative districts of China – only saw local revelers as mainland Chinese failed to travel outside of areas administered by the Chinese government as citizens reorient themselves to a world without draconian health controls.

Government data counted nearly half a million visitors to Macau over the Chinese New Year week, nearly 3x as many as visited last year, but only about a third as many as in pre-pandemic 2019 CNY. The official numbers showed 451,047 visitors arrived throughout the so-called Golden Week, an increase year-on-year of 297%.

Gross gaming revenue in Macau reportedly swelled over 232% over the previous month with the explosion of travel, gambling, and revenues coinciding with the mainland government ending its zero-Covid policies.

Comparing the number of players observed in “premium mass” areas, the report indicated that just under 500 players were observed over the course of the week. That was a little more than half as many as were found around high-limit table games in the 2019 survey.

Fewer Players Betting More

While there were fewer players at the premium tables, the players were betting more this year than during the comparable period in early 2019. The 490 players observed over the week gambling at premium mass tables bet an average of just over $3,000 per hand (US$3082/HKD 24,178). The average bet was 45% higher this year than it was in 2019.

The obvious takeaway from those two topline observations is that player numbers were down, but higher-quality players visited the premium mass gaming areas in Macau for the holidays during this period.

Across the mass gaming floors of 15 major Macau casinos, the average minimum bet observed was about $285 (HKD 2,235), roughly in line with the average minimum bets of February 2019. While close to the value of 2019 bets, it’s important to note that this year’s numbers were up about 2% but only 1% shy of the record average minimum bet observed a few months before the 2019 survey period. Some hotels in Macau were sold out during CNY in 2019.

Source: Jaw-dropping wagers in Macau CNY survey: Citigroup, GGRAsia, February 2, 2023

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