GGRAsia – Macau govt gets US$49mln in taxes from junkets in 2018

Macau govt gets US$49mln in taxes from junkets in 2018

Oct 10, 2019 Newsdesk Latest News, Macau, Top of the deck

The Macau government collected in 2018 nearly MOP394.2 million (US$48.8 million) in taxes on commissions paid by casinos to junkets, according to the government’s budget execution report. That represented a jump of 17.0 percent compared to the previous year, the data show.

The figure was included in the budget execution report submitted by the government to the city’s Legislative Assembly, reported on Thursday local public broadcaster Radio Macau. No explanation for the increase was provided in the budget execution report.

In its budget proposal for 2018, the Macau government had said it anticipated pocketing MOP280 million in taxes from junkets. The Macau government is historically conservative when forecasting gaming-related tax revenue in its yearly budgets.

As for 2019, the Macau government plans to collect MOP360 million in taxes on commissions paid by casinos to junkets, according to its 2019 budget proposal.

Macau’s accumulated casino gross gaming revenue (GGR) for 2018 stood at approximately MOP302.85 billion, a year-on-year increase of 14.0 percent. Revenue from the VIP baccarat segment amounted to approximately MOP166.10 billion last year, up 10.2 percent from 2017.

Junkets – also known as gaming promoters – are licensed by the Macau government to promote VIP gaming in the city’s casinos. Their services include: arrangement of gambling credit for players; collection on losses generated by high-roller play; and organisation of player accommodation.

A withholding tax of 5 percent is levied on commissions paid by gaming operators to junkets; but the withholding tax is not levied on the gross value.

In Macau, junket operators are offered incentives to bring players to casinos by usually being offered either a share of the revenue or a commission on rolling chip turnover, with the latter capped at 1.25 percent.

Additionally, the Macau government can authorise a total or partial exemption from taxation on junket commissions or remunerations that are paid in kind, such as transportation, accommodation, food and beverages and entertainment.

The number of licensed junkets in Macau has been shrinking since 2015. The total fell from 183 in January 2015 to 100 in January this year, according to a list of licensed operators published by the city’s gaming regulator, the Gaming Inspection and Coordination Bureau. The figures include both companies and individuals licensed as junkets.