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Macau’s foreigner-only gaming zones unlikely to be a major draw: experts

Experts are struggling to find quantifiable advantages to the new foreigner-only gaming zones in Macau casinos, noting that none of Macau’s six gaming concessionaires have so far applied for the tax break, reducing the 40 percent charge on their gross gaming revenue (GGR), which could be applicable to gambling by foreigners under the new concession system.

Nelson Kot
Nelson Kot, the president of the Macau Comprehensive Social Research Association

Speaking to AGB, Nelson Kot, the president of the Macau Comprehensive Social Research Association says that foreigner gaming zones are not a novelty.

“Singapore has a foreigner gaming zone policy for so lon,”notes the representative. “Local citizens have to pay an entry fee to gamble in casinos, and there is no such a charge for foreigners,” he states, noting that the lure is for more foreign punters.

According to Macau’s Administrative Regulation No.54/2022, the SAR’s gaming concessionaires are eligible for a waiver on the 5 percent tax of revenues generated by the foreigner-only gaming rooms. Foreigners are defined as anyone from non-Chinese territories (which encompass Macau, Hong Kong, and Taiwan).

The six operators in Macau have established areas specially for gambling by foreigners across an aggregate of 12 casino properties.

However, the proportion of foreign visitors to Macau has always been small.

Besides, Not notes that the services for high-spending foreign tourists should include supplying gaming credit, which means Macau casinos need to be cautious with money laundering issues.

“Frequent punters have many options across Asia,” notes Kot, “Macau is certainly not the most accessible place to go”, he adds.

Macau’s market has always been domestic, with most of the punters coming from the neighboring province of Guangdong, and well some regionally tourism has picked up – it’s largely through low-cost carriers, which aren’t bringing in top-tier spenders.

And those higher-income players further away have never come in large numbers – such as those from Europe or North America. Kot notes that the primary reasons are the language barrier and no strong connections with the city. “I am not optimistic about this development,” he opines regarding opening up to a long-haul market.

“Luring more foreigners via tax break is a good wish, in reality, the operators have to work hard to find a solution.

“Foreigners have a very different attitude towards gambling compared to Chinese community. Gaming is more about leisure activities,” he notes.

This observation does pinpoint a key difference between Macau’s non-gaming idol: Las Vegas – which enjoyed a short-lived period of higher revenues than the SAR during COVID.

Macau’s casino GGR stood at MOP65 billion ($8.06 billion) for the five months to May 31st, an increase of 173 percent from a year earlier. However, mainland Chinese and Hong Kong tourists continue to be the driver for Macau’s recovery.

junkets gaming investor
Luiz Lam, former director of the Macau Association of Gaming and Entertainment Promoters

According to the Macau Government Tourism Office (MGTO), the recent daily number of foreign visitor arrivals to the city ranged between 3,000 and 5,000, reaching only 20 to 30 percent of pre-COVID levels.

Kot believes that many foreigners have come to the city for MICE, and that the ratio of punters is very low. In this case, he urges the Macau government to release periodically the data, noting this may help to monitor the development (or lack thereof) of the sector.

Looking again to the foreigner-only zones, the former director of the Macau Association of Gaming and Entertainment Promoters, Luiz Lam, noted that there was a low amount of traffic in the established foreigner gaming zones.

But he also pointed out the hassle to the customer in verifying that they are foreigners, stating that “operators might prefer to skip the tax break rather than have to bother the punters,” also noting the further verification checks by the gaming watchdog on the betting figures in the specific areas – and relevant punters.

Viviana Chan
Viviana Chan
Viviana Chan is an editor, interpreter, and journalist. With over a decade of experience, she writes in English, Chinese, and Portuguese. Viviana started her career in Macau-based newspapers, where she became passionate about the region's social, financial, and cultural development. Her writing focuses on the economy, emerging industries, gaming development, political affairs, and cross cultural-exchange in the business and cultural domains. She is avid for news and eager to discover and cover stories that generate public relevance.



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