GGRAsia – Macau taxes from junkets down 24pct in 2019: govt

Macau taxes from junkets down 24pct in 2019: govt

Oct 12, 2020 Newsdesk Latest News, Macau, Top of the deck

The Macau government collected in 2019 approximately MOP299.0 million (US$37.5 million) in taxes on commissions paid by casinos to junkets, according to the government’s budget execution report. That represented a decline of 24.1 percent compared to the previous year, the data show.

The figure was included in the budget execution report submitted by the Macau government to the Legislative Assembly. It was first reported on Monday by local public broadcaster Radio Macau. No explanation for the decline was provided in the budget execution report.

The actual tax amount collected from junkets in 2019 was lower than what the Macau government had originally forecast for the full year, at MOP360 million, according to the budget execution report.

Macau’s accumulated casino gross gaming revenue (GGR) for 2019 stood at approximately MOP292.46 billion, down 3.4 percent when compared to the MOP302.85-billion recorded in 2018. Revenue from the VIP segment accounted for 46.2 percent of the overall Macau casino GGR last year, compared to 54.8 percent in full-year 2018, according to official data.

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 total number of licensed junkets in Macau – either entities or individuals – fell from 100 in January 2019 to only 95 in January 2020, according to Gaming Inspection and Coordination Bureau. The fall also marks the seventh consecutive year of decline in the number of licensed junkets in the Macau market.