Gaming law expert Óscar Alberto Madureira said on Wednesday that lower taxes on casinos in Macau is a government decision that could save wages and jobs in the industry, affected by Covid-19.
The lawyer stressed that the high costs, mainly related to labour, and the revenue crisis should force the Macau government to intervene more and to analyze two possibilities: extend the licenses of the current operators, which is only expected to happen in two years or collect less tax, with more immediate effects.
The idea was put forward at an online conference organised by the Rui Cunha Foundation in Macau, dedicated to reflecting on the post-pandemic casino industry in the gambling capital of the world.
At the same conference, gaming expert Alidad Tash argued that this is not yet the time to consider lowering taxes for gaming operators or extending licenses in China’s special administrative region, because there is an important geopolitical issue, the US/China tension, and it would be counterproductive at the political and social level to reward US capital companies.
However, the executive director of 2NT8 said that foreign workers would be the first ‘casualty’ of gambling in Macao, where “casinos are running out of money” due to the impact of the Covid-19 outbreak.
He argued that the Macau government will prevent the crisis from resulting in a wave of layoffs of locals, but that it will be foreign executives and non-resident workers who will suffer the real cost of the crisis.
Casinos are suffering losses of 80 and 90%, he said. Casino executives, foreigners, will face at best cuts in salaries, or layoffs in the worst-case scenario, he said. The same will happen with non-resident workers, given the scale of the crisis, he added.
Still, he stressed that the operators in Macau will recover more quickly than those who exploit gambling in other parts of the world, especially Las Vegas, in the United States.
On Tuesday, the International Monetary Fund (IMF) estimated that Macau’s economy will shrink 29.6% this year due to the Covid-19 pandemic.
According to the IMF, Macau’s economy, which shrank by 4.7% in 2019 and is expected to shrink by 29.6% this year, will bounce back and grow by 32% in 2021.
With an economy highly dependent on gambling, Macau saw revenues from gambling fall by 79.7% in March compared to the same period in 2019, when measures to contain the outbreak of Covid-19 virtually closed the borders of the world’s casino capital.
The latest official figures also indicate a 60% drop in the first three months of the year, after February saw historic losses in gaming revenues in a month in which casinos were closed for 15 days.
The total amount generated from January to March 2020 was 30.48 billion patacas, 45.66 billion patacas less than in the first three months of 2019.
Macau’s casinos ended 2019 with revenues of 292.46 billion patacas.