GGRAsia – Macau ADR US$44mln if HK travel ties back mid-2021: govt

Macau ADR US$44mln if HK travel ties back mid-2021: govt

Nov 09, 2020 Newsdesk Latest News, Macau, Top of the deck

Macau’s Secretary for Economy and Finance, Lei Wai Nong (pictured main row, centre), said on Friday that average daily revenue (ADR) in Macau casinos could reach MOP350 million (US$43.8 million) in 2021, if travel ties with Hong Kong are eased by mid-next year. Such assumption was part of the consideration when preparing the budget for fiscal-year 2021, said the official.

Macau’s casino gross gaming revenue (GGR) for 2021 might only reach MOP130 billion, 44.5 percent of 2019′s MOP292.5 billion, as “harsh” economic conditions are likely to persist, and recovery from the Covid-19 pandemic will “take time”, said the city’s government in its budget proposal presented last week.

Speaking at the Legislative Assembly on Friday, Mr Lei said that average daily GGR in October – not accounting the uptick seen during the Golden Week holiday period – stood at MOP220 million, already an improvement from previous months.

The official said the government had assumed daily average casino GGR of MOP350 million when forecasting the MOP130-billion figure for full-year 2021. Such assumption took into consideration that travel conditions between Macau and Hong Kong would be eased “by the second or third quarter 2021,” if the pandemic was deemed to be “contained” by then, he added.

Hong Kong – which according to some investment analysts had before the health crisis supplied at least 10 percent of Macau’s annual casino GGR – has not yet announced plans for a quarantine-free travel bubble with Macau. Currently, anyone wishing to visit Macau via Hong Kong, must have a Covid-19 test certificate issued within 24 hours of arrival, and, even then, must undergo a 14-day quarantine.

In his Friday remarks, Mr Lei stressed however that the government would prioritise residents’ health over “economic growth” when considering the city’s border control measures.

According to the 2021 budget plan – approved in its first reading on Friday by the city’s Legislative Assembly – Macau’s take from gaming tax is expected to reach MOP45.5 billion for fiscal-year 2021. The government taxes the GGR of Macau casinos at a rate of 35 percent, but other levies on casino gaming raise the tax rate to 39 percent, in effect.

The Macau government highlighted in its 2021 budget proposal, that the city faced risk of “structural fiscal deficit”, as Macau had a “narrow tax base” and “increasing expenses but no rise in income”.