Macao officials have announced an increase in casino tax revenues despite a downturn in gross gaming revenues and declining share prices. The latest financial data from the Macau Treasury Bureau shows that cumulative revenue for the first half of this year amounted to 59.542588 billion patacas (approximately $7.4 billion). Of this, a significant portion, 86%, was generated from casino taxes, which rose by 13.1% year-on-year to $6.3 billion. Gaming tax thus constitutes 86.0% of the total revenue.
This growth has resulted in a fiscal balance surplus for Macao of $1.6 billion, marking a 14.7% increase compared to 2022. However, other figures signal concerning trends. Casino revenues dropped by over 12% year-on-year last month, as reported by the Macao-based publication, Macau Shimbun. The Treasury Bureau noted that this represented the first instance in six months that revenues fell below the monthly average target of $2.4 billion.
Despite a surge in visitor numbers to Macao, casino shares have been declining on the Hong Kong Stock Exchange recently. Over the past month, the exchange’s Hang Seng Index has decreased by more than 2%, with Macao casino shares plummeting even more. Sands China's share prices have decreased by 7.6%, while SJM Holdings saw a drop exceeding 12%. Other operators have also recorded losses; MGM China shares fell more than 3% over the past four weeks, and Wynn Macau shares dropped by 4.1%. Conversely, Galaxy Entertainment is notable for being the exception, with its share price rising by nearly 2% in that timeframe.
While tax revenues and increasing tourist numbers are encouraging, the Gaming Inspection and Coordination Bureau reported a significant month-on-month decline of over 18% in gross gaming revenues from May to June. Some financial analysts suggest that the region might experience a recovery post-World Cup, but medium-term indicators appear less promising.
In an effort to diversify, several major integrated resorts are transitioning towards non-gaming revenue sources, focusing on the development of dining establishments, concert venues, and family entertainment spaces. Meanwhile, authorities in Macao are contending with a rise in crime linked to betting rings operating out of Mainland China. Police are particularly concerned about a surge in proxy baccarat betting services that cater to remote gamblers in cities across Mainland China.
These betting rings are reportedly recruiting unemployed individuals to enter Macao carrying concealed cameras and modified clothing, allowing them to livestream baccarat games and place bets on behalf of clients.
The structure of these schemes includes offering proxies a share of the winnings and allowing them to accumulate loyalty points as they execute remote bets, which they place under the instructions of sponsors through chat apps and Bluetooth earpieces. Just this month, police arrested ten individuals involved in these operations, including five Chinese nationals apprehended within 48 hours for managing proxy betting activities at local casinos. One arrest involved a woman who displayed suspicious behavior near a baccarat table. Upon police questioning, she allegedly attempted to destroy a small camera linked to her smartphone, after which investigations revealed her involvement in multiple proxy gambling sessions since her arrival in Macao in late June.
