Good morning. In our Deep Dive today, we discuss the thorny issue of just how the Macau government will replace its lost tax revenue from the VIP gaming market. With Beijing ratcheting up the pressure, that sector isn’t coming back any time soon and the city’s space and infrastructure restraints will likely mean it can’t accommodate enough mass customers to fill the gap.
What you need to know
- Crown Resorts said there is a “very real potential” of default under its debt facilities if Victoria cancels its license and forces it to sublease its casino.
- Paradise Co. posted a 13.4 percent gain in 2Q21 sales boosted by strong local demand for its hotels, though casino revenue continued to be affected by Covid.
- Hong Kong is extending its compulsory quarantine requirements and various other mandates until March 31st of 2022 on concerns about imported cases of Covid.
- South Shore has been warned of potential delisting from the Hong Kong Stock Exchange if it doesn’t meet requirements to resume trading.
On the radar
- Raffles at Galaxy Macau is set to open on track in 2021.
- Macau’s 1H21 tax take has reached only 39% of the year’s goal.
- The number of foreign workers in Macau has fallen 11% since the pandemic.
- China is removing karaoke songs that encourage gambling.
What the papers say
- Further unpaid leave not yet to be implemented by Macau operators.
- IPI now seeking local workers to complete casino resort.
Macau lawmakers appear to have recognized that China’s new policies penalizing gambling and attempting to stop its citizens from gambling abroad will have a direct impact on how Macau runs its gaming industry and how much revenue the government receives from its largest tax-contributing industry.
In August, the committee of the Special Administrative Region’s (SAR) lawmaking body tasked with providing the government advice on the city’s gaming concessions, admitted that recent changes to the Mainland Chinese penal code could make it “difficult for VIP rooms to continue their operations.”
Ben Lee, managing partner of iGamiX Management and Consulting discusses the challenges Macau will face in generating enough mass revenue and subsequently tax revenue from the mass market.
- Bloomberry/ICTSI has donated 68,300 vaccines to local government units.
- TransAct is raising additional funds through a public stock offering.
- Pragmatic Play has been granted ISO27001 certification.