Macau to Create Foreigner Only Special Gambling Zones In 2023

Summary

• Macau casinos will set up designated gambling zones for overseas players
• These special gambling zones may also avail of up to 5% GGR tax break
• Gaming analysts are not confident the proposed move will work

From January 1, 2023, casino operators in Macau will be required to create exclusive gambling zones for foreign patrons as part of new regulations aimed at boosting the region’s gaming tourism. The new rules also bring into play a tax break scheme announced earlier this year by the Macau government which was designed to incentivize casino concessionaires that recruit customers from overseas.

Macau Operators Could Get Up to 5% Gaming Tax Relief

Key details of the new administration regulations were recently announced by Adriano Marques Ho, director of the Gaming Inspection and Coordination Bureau (DICJ). Ho said the creation of designated gambling zones for foreigners will help the government calculate the amount of revenue coming from non-Chinese customers.

Casino operators could enjoy a tax break of up to 5% if they attract foreign customers, though the current Chief Executive of Macau Ho lat Seng will have the final say on the matter.

Macau is currently charging a 40% gaming tax on operators, including around 5% in compulsory levies to provide funding for the Macao Foundation and the promotion of tourism and development of the city.

Ho stopped short of providing further information as to the targets that must be achieved by casino concessionaires for them to be eligible for the tax rebate. He noted though that the DICJ will release a guide on certain requirements that must be met before overseas customers are admitted into the designated gambling zone.

The tax reduction will also only apply to GGR generated in that particular zone, with tourists from mainland China, Taiwan, Hong Kong, and Macau not covered by the new policy.

Andre Cheong Weng Chon, Secretary for Administration and Justice, stated during the press briefing that the new gaming tax scheme will help operators mitigate the high costs of bringing foreigners to Macau.

Analyst Doubts Effectiveness of New Tax Break Scheme

The Macau government has introduced the changes in a bid to position the region as a tourist and leisure destination for people from all around the world, effectively ending its overreliance on tourists from mainland China. The move also comes as mainland China continues to tighten its overseas gambling laws, hunting down Chinese nationals involved in cross-border gambling.

While city officials are touting the new regulations as a way to boost foreign visitation, some analysts don’t share the same opinion. DS Kim of JP Morgan Securities (Asia Pacific) Ltd isn’t confident that the new policy would make a significant difference to foreign GGR, considering that the revenue coming from overseas players only accounted for less than 10 percent of mass GGR before the pandemic.