Macau to Receive Huge Increase in 2025 Junket-Related Tax Revenue
The Macau government has projected a substantial increase in tax revenue from commissions paid by casinos to junkets for fiscal year 2025. According to an opinion report on the 2025 budget plan released by the Legislative Assembly, the government expects to collect MOP100 million (US$12.5 million) in such taxes, a 233.3% increase compared to the MOP30 million anticipated for 2024. This forecast signals the government's confidence in the recovery and growth of the junket-related sector within the city's gaming industry.
Fireworks light up the sky over Macau. (Source Macau Daily News)
LISTEN TO THIS ARTICLE:The report, which outlines Macau's income and expenditure plans for the upcoming year, did not provide a detailed explanation for the significant expected rise in junket-related tax revenue. However, this follows a notable trend observed in 2023, when the government collected MOP62.58 million in taxes on commissions paid to junkets. This figure represented a 526% increase from the originally estimated MOP10 million for that year, as detailed in the 2023 budget execution report submitted to the Legislative Assembly.
Related: MGM Finds Novel Solution for Macau Casinos as Junkets Continue to DisappearJunkets, formally known as gaming promoters, still play a key role in Macau's casino industry by attracting high-rolling VIP players. These entities, which have seen their numbers dwindle due to money laundering and other illegal activity, are licensed by the government and incentivized through commissions based on rolling chip turnover.
A withholding tax of 5% is applied to these commissions, although the tax is not calculated on the gross value. Under current regulations, commissions for junket operators are capped at 1.25% of the rolling chip turnover.
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Recent legislative changes have altered the operational framework for junkets in Macau. Since the implementation of a new law on August 1, 2023, junkets are no longer permitted to issue credit directly to gamblers. Instead, only gaming concessionaires are authorized to extend gambling credit to patrons. This adjustment aims to enhance oversight and streamline credit issuance within the gaming sector.
As of late September, Macau had 24 licensed junkets, according to data from the Gaming Inspection and Coordination Bureau. For 2025, the government plans to maintain the cap on licensed junkets at 50, with restrictions on the number of junket partners each of the six casino operators can engage. Sands China Ltd and SJM Holdings Ltd currently have the highest allowances, with permissions to work with up to 12 junkets each.
The projected increase in junket-related tax revenue aligns with broader expectations for the recovery of Macau's gaming industry. The 2025 budget estimates the city's gross gaming revenue (GGR) to reach MOP240 billion, supported by a rebound in tourism and leisure activities.
This is a notable rise compared to the MOP216 billion GGR estimated for 2024. Recent data indicates that Macau's casino GGR for the first 11 months of 2023 totaled MOP208.58 billion, marking a 26.8% year-on-year increase.
With the gaming sector continuing to recover from the challenges of the past few years, Macau's government appears optimistic about sustained growth in its flagship industry. The significant increase in projected tax revenue from junket commissions underscores the government's reliance on the gaming sector as a cornerstone of the city's economy while highlighting the evolving regulatory landscape aimed at ensuring sustainable and accountable industry practices.
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