According to Bloomberg, casinos in Macau have been set a new minimum revenue threshold at a “easy-to-reach” level in an effort to bring relief to the region amid Covid-19 restrictions and regulatory changes.
Authorized gaming companies in the gambling hub must generate at least MOP$7 million (US$870,000) per table and MOP$300,000 per machine. It raises the total revenue threshold to MOP$45.6 billion, which is comparable to 2022 levels.
According to the Macau Government, firms can operate up to 6,000 tables and 12,000 machines in total for 2023.
It’s the first time the government has imposed a formal cap on table numbers and a minimum income requirement, with the goal of tightening control over casino operators.
Following a new gaming law passed in June, Macau’s casino companies are taxed at 40%, one of the highest rates in the world, with many concerned that if the minimum level was set too high, they would be forced to make up the shortfall to the government.
According to a Bloomberg survey of seven brokerages last month, gross gaming revenue (GGR) has dropped 38% this year to MOP$54 billion, a drop of more than 80% from pre-pandemic levels recorded in 2019.
The six casino operator licenses held by Sands China, Wynn Macau, Galaxy Entertainment, MGM China, SJM Holdings, and Melco Resorts in Macau will expire at the end of this year, with all operators expressing interest in bidding for new permits. All interested parties have until September 14 to submit bids, with the new permits taking effect at the start of next year.
Authorities appear to be acknowledging the challenges that casinos face, but the announcement does not appear to be the end of the story, with the new regulations potentially causing some challenges and even controversy for those involved, with issues such as problem gambling potentially coming into play if casinos must constantly meet the minimum threshold.