The Macau government’s gaming tax collections are down 56.5 percent through the first five months of the year as travel restrictions between the territory and mainland China, its principal source of gamblers, continue to batter casino revenues.
Official data show funds generated from the tax on win, effectively 39 percent including direct tax and other levies, totaled MOP21.04 billion (US$2.64 billion) from January through May. It works out to 42 percent of the amount the government budgeted for 2020, according to projected collections that have been revised downward to account for the impacts of the Covid-19 pandemic. The government now expects to collect MOP49.98 billion for the year.
The government still recorded a surplus for January-May, MOP8.23 billion, though this was down more than 74 percent from the same period last year. It’s been a major blow to a public sector that relies on gaming for 80 percent or more of its annual revenue.
The city’s 39 casinos have seen aggregate gaming revenue plummet by 74 percent year-on-year since the pandemic first hit in January. March (minus-80 percent), April (minus-97 percent) and May (minus-93 percent) have been the worst months so far. And June is expected to bring more of the same, according to brokerage Sanford Bernstein, which is forecasting a 93 percent drop compared to June 2019.
With visitation at a trickle, most analysts don’t expect meaningful improvement until cross-border travel returns to something approaching pre-pandemic normalcy.
As it stands, however, Macau, Hong Kong and mainland China continue to impose various overlapping restrictions designed to contain the spread of the virus, which has disappeared from Macau to date but is still spreading in its sister city and in pockets on the mainland.
Currently, Macau allows only residents of the mainland and Hong Kong and Taiwan to enter the city, and is quarantining those who recently have traveled outside those three jurisdictions. Hong Kong is quarantining all arrivals from the mainland and from Macau and Taiwan. The neighboring mainland province of Guangdong is quarantining everyone returning to China from Macau and Hong Kong.
But it’s the central government that has cut off the largest and most lucrative source of Macau’s gamblers, with a suspension dating to January of most visas for individual travel outside the country. Prior to that, 49 cities had been issuing the permits under the Individual Visit Scheme, as it’s known. As of last week, only Chongqing was allowed to begin processing them again.
