Macau | No reason for Gov’t to not disclose Jockey Club’s tax debt – Experts

Macau (MNA) – Gaming and economy experts told Macau News Agency (MNA) this Tuesday that there is no reason for the Macau SAR Government not to reveal the full amount of taxes owed by the company responsible for operating the Macau Jockey Club (MJC) or release details about the previous tax agreement made between the government and the company.

“The concession is not private, it is public. There shouldn’t be any problem in revealing the amount owed, the details of the agreement and where it was published,” economist Albano Martins told MNA.

Reports by local media stating that the Macau Horse Racing Co. Ltd. had not paid rent since 2009 or taxes related to total betting volume since 2002 led the government to issue a rebuttal statement late Monday.

In its announcement, the authorities stated that the company running the Jockey Club facilities in Taipa had paid its property rental yearly ‘with no delay up to now,’ adding that it had reached an agreement with the company in 2015, according to which taxes due would be paid at a fixed annual amount.

The government further said that the company has been granted a three-year period to settle its debt.

However, the exact amount of taxes owed by Macau Horse Racing Co. has not been revealed by the government.

When asked by MNA about the full amount of taxes owed by the company, the Financial Services Bureau (DSF) said that ‘due to privacy reasons’ it would not ‘disclose the information of individual companies’ – a justification experts said does notapply to a public gaming concession.

The 2015 tax deal mentioned by the government is not described in the contract amendments lodged with the DSF and replicated on the official website of the Gaming Inspection and Co-ordination Bureau (DICJ), where it only mentions the two-year extension period agreed at the time.

MNA asked the DICJ if information about the tax deal had been published elsewhere, to which the department stated that the choice not to publish such information refers to a decision by the Macau SAR Government of not disclosing it.

No response on the issue was provided by the DSF by the time this story went online.

According to Mr. Martins, any alterations relating to the taxes to be paid by the company “should have been published” in the Official Gazette, with the information that the company owed taxes having only been revealed by the Secretary for Economy and Finance Lionel Leong Vai Tac.

The Secretary stated last month that one of the reasons for extending the company’s concession – which expired on February 28 – for another 24 years and six months was to give an opportunity to the company to reimburse taxes owed, with the executive of Horse Racing Co., legislator Angela Leong On Kei, vowing to invest MOP1.5 billion in the construction of non-gaming elements and facilities in the property.

“I can’t understand how a company without capacity to pay its debts, and which needs a deadline to pay them could get a 24-year and a half extension to its contract […],” said Mr. Martins. “If they have so much money to invest, why didn’t they pay the owed amount previously? It’s all very obscure.”

Disclosing the deal

Professor Wang Changbin of the Gaming Teaching and Research Centre at the Macau Polytechnic Institute told MNA that he also believes the government should publish the information pertaining to the deal and the amount owed by the company.

He further stressed that he did not have any prior knowledge of a similar agreement having been reached with another gaming operator.

According to Professor Wang, due to the losses registered by the company in recent years, the amount they would have to pay the government in taxes would be “just a couple of million.” Since such an amount is “small compared to other gaming revenues,” he continued, it might have led the government to waive those taxes in order to preserve the track.

The MJC recorded accumulated losses of some MOP4.07 billion for the financial year ended December 2016, having failed to make an annual profit since 2005.

“In this case, the government could revoke their licence, but because we have so many casinos in such a small area and most customers would go to casinos instead of the Jockey Club, I think that the government, considered this, and might have agreed to waive their taxes,” said Professor Wang.

When asked why the MSAR Government has been giving what seems to be preferable treatment to the Jockey Club, Professor Wang only said it might be a “political” decision.

[Edited by Sheyla Zandonai]