Harry Cummins
Updated on: October 16, 2024 7:58 am GMT
Despite global shifts in gambling trends, Macau’s casinos continue to generate significant revenue, but not without challenges. In September 2024, Macau reported a gross gaming revenue (GGR) of US$2.2 billion, marking the lowest year-to-date performance.
Tax Revenue Shows Positive Growth
In August 2024, gambling in Macau produced 7.16 billion patacas (approximately US$892.9 million) in tax revenue. This figure reflects an increase of nearly 5 percent from July. Over the first eight months of the year, the total tax revenues from gambling amounted to 58.78 billion patacas (around US$7.37 billion), more than a 50 percent increase compared to the same time in 2023.
This robust growth in tax revenue is crucial for the local economy, as 85 percent of the Macau government’s revenue derives from gambling. Here are some key statistics:
- Total revenue from gambling taxes exceeded 69.4 billion patacas (about US$8.7 billion) from January to August.
- This total accounts for more than 70 percent of the 83.61 billion patacas (US$10.49 billion) the government hopes to raise in gambling taxes for 2024.
- In 2023, Macau authorities collected 65.26 billion patacas (approximately US$8.18 billion) in gambling taxes, exceeding their budget by more than 28 percent.
Quarterly Performance Declines
Despite the positive tax revenue, the overall gaming market is experiencing challenges. Macau’s headline GGR for the three months ending September 20, 2024, dropped 1 percent quarter-on-quarter to 55.6 billion patacas (around US$6.94 billion). This decline is below the typical 2 percent to 3 percent growth expected during this period.
JP Morgan analysts highlighted that the quarterly slump was anticipated. Factors contributing to this decline included a slow start in July and several unfavorable conditions in early September. According to analysts DS Kim, Mufan Shi, and Selina Li, “the result was not as bad as expected” given the recent trends in consumer and luxury spending in China.
Looking Forward: Golden Week Expectations
The approaching Golden Week holiday is critical for Macau’s gaming revenue. Analysts predict that GGR during this period may average between MOP$830 million (approximately US$103.6 million) and MOP$910 million (around US$113.6 million) per day. They are eager to analyze the first six days’ performance, expecting a daily GGR exceeding MOP$900 million (about US$112.4 million) could hint at possible growth in the sector.
The Future of Gambling in Macau
As Macau navigates through ups and downs in gambling revenue, the government remains focused on diversifying its economy beyond gaming. However, gambling taxes still play a vital role in funding public services and projects.
The gaming industry’s susceptibility to both local and international economic impacts makes its future unpredictable. Nonetheless, as Macau’s casinos adapt to ongoing challenges, the continued growth in tax revenue offers a silver lining for the local economy’s sustainability.
Macau’s gaming revenue has been going down compared to the past, but the rise in tax collections shows just how important this industry is to the local economy. Events like Golden Week are coming up, bringing both chances and challenges. People are eager to see how the gaming industry will change and adjust to these new situations.
