According to Macau’s Financial Services Bureau, the Macau government picked up over $8.78 billion in taxes from gaming operations in the city during the first eight months of the year. The return is a nice addition to the city’s coffers and represents a 17% increase year-on-year.
The bureau added that it earned just over $10.53 billion in current revenue from all of the sources for the eight-month period, an increase of 15.3% over last year’s figures. Direct taxes are calculated on taxes on income from gaming and Chinese lotteries, horseracing, greyhound racing, instant lotteries and taxes paid on commissions that are earned by gambling junket promoters.
It’s not cheap to operate a casino in Macau. Gambling operations have to pay a 35% tax on their gross gaming revenue (GGR), but this is increased by 4% as additional taxes are added to the gaming sector. For the first eight months of the 2018, the GGR total was $25,043 billion, according to the city’s Gaming Inspection and Coordination Bureau (DICJ). This is a 17.5% increase year-on-year.
In total, the Macau government expects GGR for the year to reach more than $28.49 billion and had anticipated picking up around $10.21 billion from direct gaming taxes. By the end of August, it had already collected 86% of that amount. Government officials in the city typically underestimate tax amounts, remaining cautious about gambling performance.
The odds are good that Macau will see the revenue it expects. Despite last month’s typhoon that rolled through Asia, September GGR increased for the month. It rose to $2.72 billion, a year-on-year increase of 2.8% over the $2.66 billion it took in last year. However, this was well below the amount previously forecast by analysts, who had predicted as much as a 20% gain.
Following the typhoon, Bernstein analysts reported, “GGR this month had been impacted by Typhoon Mangkhut, which hit Macau during the weekend of September 15 and 16, with the closure of all casinos and disruptions to transportation in and out Macau. Macau casinos had been shut down by Typhoon Mangkhut for 33 hours. The damage from the typhoon to casino properties was immaterial, but GGR was impacted as a result of the weather, casino closures and transport disruption.”
Now that things are returning to normal, the final quarter of the year should find the gaming scene reinvigorated. The end of the year celebrations will give a final boost to the city in order to stay ahead of its forecasts.
