Macau’s Gaming Inspection and Coordination Bureau (DICJ, for its acronym in Portuguese) has received an investment plan from the Macau Horse Race Co. Ltd. (MHR), operators of the Macau Jockey Club. Paulo Martins Chan, who heads up the bureau, said that the new concession contract with MHR includes a schedule for the company to fulfill the investment.
The news came only hours after a Macau lawmaker asserted during a meeting of the Legislative Assembly that legislators had not yet received any investment proposal by the company. Chan later stated that the DICJ would submit the plan to the appropriate Legislative Assembly committee once the bureau had completed due diligence of the proposal.
This past February, the Macau Jockey Club was granted a 24-year extension of its horse racing monopoly. One of the conditions of the extension was that it would present an investment plan stipulating that the company would spend $186 million of its own money to improve club facilities and increase non-gaming venues.
The extension has caused a bit of a rift among lawmakers. In March, it was revealed that the company owed a minimum of $18.9 million to the government in back dues, and that the government knew about the outstanding debt, which stemmed from missed payments between 1997 and 2005. The debt was discovered in 2015, but nothing was done to force the company to pay up.
When Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac, uncovered the outstanding debt, he said, “After we discovered this [outstanding] amount, I asked [MHRC] in 2015 – when we were dealing with the [horse racing] concession – to repay the government in 10 years.” To date, there has not been any public indication that the company has made any of the necessary payments.
Lawmakers are also questioning an exemption on taxes authorized by the government to the racetrack. Since 2002, the Macau Jockey Club has been exempt from having to pay a fixed annual tax of a little more than $3 million.
MHRC is more than likely weighing its options regarding whether or not to continue with the club. Last year, horseracing only accounted for 0.04% of the gross gaming revenue in Macau and MHRC hasn’t turned a profit since 2004.