Of Macau’s Big 6 casino concessionaires, Melco Resorts and Sands China are the first to set aside gaming zones exclusively for clients who come from outside China. The city’s government has promised tax breaks for operators who build a stronger foreign customer base.
According to Asia Gaming Brief, both Sands and Melco have submitted plans for the zones to Macau’s Gaming Inspection and Coordination Bureau (DICJ). The other four concessionaires—Wynn Macau, Galaxy Entertainment Group, MGM China and SJM—all will follow suit.
As the regulator noted, casino concessionaires must “identify sources of foreigner patrons and establish a database on them in accordance with the measures approved by the [DICJ], so that all necessary documentation and information are stored for being eligible to get a reduction” on the current tax on gross gaming revenues (GGR).
Sands China will open a foreigner-only zone at its Venetian Macao resort, while Melco is expected to install a space in its flagship City of Dreams, reported IAG.
Davis Fong, director of the Institute for the Study of Commercial Gaming at the University of Macau, told the news outlet that the zones must have a separate entrance, updated security checks and distinctive chips, for better monitoring. All are subject to scrutiny by the DICJ “to make sure every procedure can work well.”
GGRAsia reports that MGM China will have two dedicated zones for foreigners, at MGM Macau and MGM Cotai, each with baccarat tables and cages and located near a junket or VIP room.
Macau’s new gaming law makes concessionaires eligible for a waiver on the 5 percent tax on GGR generated by foreigner-only gaming zones (foreigners are defined as guests who hail from outside China and its special administrative regions, or SARs, which include Macau, Hong Kong and Taiwan.)
Fong said operators “can offer free rooms for foreigners who gamble in those zones.” That could boost hotel occupancy in the city, which topped out at only 74 percent in January, despite the return of tourists and the Chinese New Year. Borders to the city reopened January 8; the week-long annual holiday began on January 22.
Cheong Weng Chon, Macau’s secretary for Administration and Justice, has commented that gaming revenues generated by foreign clients is “quite low, therefore we hope that these incentivizing measures request or require the concessionaires to launch projects to attract foreign tourists.”
The model is similar to VIP rooms, “but just for foreign players,” he told Macau Business. “Identification documents such as passports have to be presented before entry.” Foreigners won’t be restricted to the zones, so the areas will “be largely for concessionaires to bring in their own clients, through promotion offices set up outside Macau,” akin to junkets, IAG reported. The rooms are not expected to produce more than 3.58 percent of total GGR.
Fong added that many foreigners already live in close proximity to Macau, in Hong Kong and the Greater Bay Area. “Those foreigners don’t need to take a flight to come to Macau, they can simply take a bus or ferry,” he told IAG.
As reported by the South China Morning Post, Hong Kong Chief Executive John Lee said the SAR will cooperate with Macau to boost visitation, with the goal of developing “twin-destination travel” between the cities. Officials with the Macau Government Tourism Office (MGTO) say they will soon meet with their peers in the Guangdong-Macau In-depth Cooperation Zone in Hengqin about promoting Macau-Hengqin tourism. The government will also expand funding to attract visitors from Taiwan.
More than 1.6 million people visited Macau in February. Most came from Mainland China and Hong Kong.
