In a February 6 letter to Macau’s chief executive, a junket trade group asked the government to reconsider the return of a tax on commissions paid by casinos to VIP promoters, or at least partially waive the tax.
U Io Hung of the Macau Gaming Promoter Professionals Association confirmed sending the letter to Chief Executive Ho Iat Seng.
Under the city’s gaming law, junkets earn 1.25 percent commission on rolling chip turnover from their concessionaire partners. Bringing back the tax would have a financial impact on junkets, which make their living by promoting VIP gaming, then arranging travel and other accommodations to bring in the high rollers.
As reported by GGRAsia, under the former junket law, the local government could waive all or some of the taxes on junket commissions or in-kind perks such as transportation, food and beverage, hotel stays and entertainment, subjecting junkets to a lower net tax rate. But that option isn’t available under the revised gaming law.
So junkets have asked the government to employ a legal provision, unused since 2007, that enables the chief executive to authorize a total or partial exemption of up to 2 percentage points for up to five years.
“The Macau chief executive has the possibility to waive part of the levy on commissions paid to junkets. What we are urging the government to do is just that,” U told GGRAsia.
“With this levy on commissions, we’re also at a disadvantage,” he said, noting that VIP operations run directly by casinos aren’t subject to the same tax.
The newly-formed Macau Gaming Promoter Professionals Association already has 50 industry members, U said, including 11 licensed junket operators. While a total of 36 junkets are now licensed to operate in Macau, fewer than one-third are operational. The sector took a hit with the arrests of two industry bosses—Alvin Chau of the Suncity Group, and Levo Chan of the Tak Chun Group—and the subsequent shutdowns of their VIP companies.
Chan and eight co-defendants are still on trial at Macau’s Court of First Instance on charges that include illegal gambling, money laundering and running an illicit criminal organization. They’re also charged with defrauding the Macau government and the concessionaires of rightful revenues.
Chan was arrested by Macau police in January 2022, less than two months after the arrest and detention of his rival, Chau. Last month, Chau was convicted of similar crimes and sentenced to 18 years in prison.
Macau’s junket sector in Macau has taken a plunge due to stricter oversight in the city and on the mainland, where most VIP customers originate.
